I was intrigued by the prominent article on the permabull site Zerohedge announcing that on Monday (today) markets would explode higher thanks to the actions of the most evil person on the face of Earth, Janet Yellen. I decided to dig deeper into this, and I found this helpful thread. It’s a long, clumsy read to go through it (how’s that for a soft sell?) but you might want to click it and attempt to understand it. It’s a bit of a slog.
I used SlopeCharts to create the “liquidity chart” the tweet’s author mentioned in passing, and, for what it’s worth, here ya go:
What was more intriguing to me was the more-refined liquidity formula I have, which I call the Fed Spread. I had gotten out of the habit of looking at it, but just now, taking a fresh look, I’m pretty freakin’ impressed. Instead of exploding higher, as the bulls at ZH demand, it seems to me the market could be in trouble in the coming weeks.
It’s surprisingly hard to figure out when that pig Yellen’s announcement is going to be, but as far as I can tell, it comes in two parts: today and Wednesday (which is also Fed day, led by the SECOND most evil person on the planet). In any case, by the end of this week, it’ll be awfully interesting to see who was right and wrong.
