The Diminishing Marginal Utility of Global QE
In the chart below I plot total U.S. market cap and the size of the Fed’s balance sheet (B/S) in the top panel; in the lower panel I plot a ratio b/t the same two items [market cap / (Fed B/S)]. Disregarding anything…...
Global Deflation and Gold as a Function of Chinese Electricity Production
In the chart below I plot monthly Chinese electricity production (white) with gold (yellow) in the top panel. In the two panels below that I plot the 24 mo and 12 mo RoCs for Chinese electricity production, respectively. Note that…...
BofJ’s Next Move
The Bof J begins and concludes its monetary policy meeting tomorrow and Fri, respectively. The Fed tightens (highly likely) today and Draghi disappointed two weeks ago, so the BofJ really needs to pull through with a huge gift to global…...
The Fed Plans to Hike Rates as it Fails at Its Price Stability Mandate; Gold Should Soon Begin Rising as a Result
Along the lines of our post two days ago re: the St. Louis Fed’s new deflation indicator, below we present a similar indicator that tracks the same institution’s estimate of the Fed hitting its mandated 2.0% (i.e., midpoint of 1.5%-2.5%) inflation…...
Geniuses Abound
As of late, I took notice that the “dumb” money has been feeling pretty good about the market and its prospects for additional upside. I suppose that happens when stocks go up for five consecutive years, culminating in this year’s…...
What Can Market Internals Tell Us About the Current U.S. Equity Sell-off?
If the selling is to continue, it likely does so until the 10 day MA of the ratio of NYSE 52 week lows vs. highs reaches the high teens in the chart below. As of right now, per the red…...
Houston, Do we Have a Problem?
Remember this post that had us wildly bullish a few months back given the statistical significance of its conclusions? Well, that analysis went into effect as of the week of 8/17/12, the week we received the signal. As of the…...
CFNAI Suggests the Fed Has Destroyed the Market’s Discounting Mechanism Over Past Decade with Pay-Back Being Increased Volatility
Stepping away from the “only prices matter” meme for a second to highlight some more work on the Chicago Fed National Activity Index (CFNAI). Historically, when the rolling 3 month average of this index hits and/or dips below a reading…...
NYSE 52 Week Lows Once Again at Levels that Have Coincided with SPX Pull-Backs Over Past Year+
On 6/27 we noted that new 52 week lows on the NYSE had been trending higher over the past year even as the SPX was flat to up. We also noted that if history held, it was likely not the…
Taking a Quick Dive into Market Internals
Attached is a chart that compares new 52 week lows on the NYSE against the SPX over the past year+. A couple of points that should stand out immediately: 1) New 52 week lows continue to trend higher even as…...