"I''d like to be an athlete."
Under 4,160 people
Phil & Ringo practice in a weakly bouncing market.
This is the song we''ve been singing since late last month, as, once and for all, the S&P and other indexes fail to break over their weak bounce lines.
HOPEFULLY (not a valid trading strategy) we are consolidating for a move higher, but, as I warned back on May 13th in "Flip Flop Friday Stocks Cheer Up for No Particular Reason":
There has been a lot of damage since the Death Cross last month, but it''s only within our predicted range nothing to shake us out of our overall strategy. We expect the 4,000 line (blue) to evenually settle down as the middle of the range between 3,680 and 4,320, where the S&P should consolidate into July earnings reports and then we''ll see how they go.
It''s not likey we get up to more than 4,320 but, if I''m wrong, we''ll see upside resistance at 4,000 and extremely strong resistance at 4,160 (weak bounce). That will cut the 200-day moving average to 4,320 around the end of June and the 50-day should then be down at 4,160, and we''ll just have to be wary of the lower trading range.
So here we are, a month later, and yes, that 4,160 line has had a quite strong resistance, but the way we have been hugging that 4,160 line has slowed the 50 and 200 dma''s descent, which means the market may take more time to recover. At 4,100 (average) we''re 120 points below the 50 dma, and this means the 50 dma will cross below the Weak Bounce Line (4,160) in 25 sessions or for another month,
We''ll expect 3,840 again before we see 4,320 for the rest of the summer but just because we anticipate something doesn''t mean we don''t stop looking for new information.
The question is, what will happen in the next 25 sessions that will push the markets over the 4,160 line? We need the War to come to an end, good news on Inflation, better Earnings Reports, more Stimulus, slower Rate Hikes, and other positive Economic Data to move higher, right? The Fed meets next week and they will hike 0.5 percent, big Earnings don''t come again until mid July, and the pre-announcements are causing us to die. It appears like
As the global economy is slowing (see yesterday''s PSW Report) and it will be a miracle if we avoid a Recession and not that surprising if we throw ourselves into a Depression because we paid over $11 TRILLION Dollars to build our $20 trillion Economy. But all that bought us was a prettier GDP number, but it came at the expense of our balance sheet and now it''s time to pay the piper, and here''s how you know it''s not unusual to know what they
I think it was 2001, but the Government decided that people would not face any economic retraction; now our debt is $32Tn, 150% of our GDP and the Fed''s 2% rise in interest payments will add $700 billion in interest payments alone. This will be added to our still $2Tn ANNUAL deficit, and the only way that changes are to increase revenues (not likely in a Recession) or taxes (not likely given our Government is a bunch of corporate puppets).
This is a cool chart but it''s starting early 2020 so they underestimated our debt load in 2022 by about $10Tn we''re already where they predicted we would be in 2045, according to the report: "The indefinite rise of debt might cause havoc on the underlying issue of rising inflation and declining confidence in the US Dollar as an international reserve currency."
It''s interactive, so take a look at it. It''s also depressing, so play well.
Yesterday''s (another Beatle song) first 10-year auction saw "a net lack of interest," according to a data. The 10-year rate, which has been dropped to 3.1 percent, and today is expected to sell $19 billion worth of 30-year notes, indicating that $98 billion is only enough to keep the lighs on for two weeks next year as rates rise.
"This is the cycle of illusion"Untilled up in trouble, laced with confusionWhat are we doing here?
Grease is the wordGrease is the word, it''s got groove, it''s got meaningGrease is the time, is the place, and the motionGrease is the way we are feeling," according to Frankie Valli.
The US borrows $200 billion per month and now the Fed has close to a $10 trillion balance sheet, which they are reducing their bonds purchases but who will step in and fill the vacuum especially in a world that is having its own economic difficulties? If the Dollar is weakening, and people do not want our currency or notes priced in our currency?
Notice France''s 10-year notes increased by 6.5 percent in that time, Spain and Italy hit 6%. 6% of $32Tn is $2Tn even if it only lasts for a year that would be devatating as interest would add $2Tn to our debt in a single year, and we''d have to borrow $400 billion a month to pay these payments. What''s the future outlook?
Check your hedges, and make sure you are fairly covered!
