This market seems very odd to me lately ever since mid december(DEC 21 LTRO Progam) the market just continues to drift higher with no real sellers insight. News data doesn't really matter we just drift higher. Its obvious LTRO and Fed SWAP cut was huge stimulus to the market and LTRO is basically indirect QE. This Market seems just like it did trading during FED QE. Gap UP's with slight morning pullbacks met by buyers, then drift higher all day. Just blow through technical resistance doesnt seem to matter. NY Fed is just hitting the bid constantly! LOL.
As we come into resistance 1310-1320 spx it should be interesting. This move is getting pretty parabolic.
The always know realization that sucks to believe is that the powers that be control all, and will preserve the status quo at all costs even if it means financial and fiscal insanity.
It feel like the Fed is just outright buying futures and there just is no sellers. The other thing is how all the sudden we just stopped correlation EUR/USD moves lower and our market moves higher? DX Rising usually a headwind for risk assets, ever since LTRO the EUBSC (3 Month Swap) has rallied dramatically as obvious bank stress has eased at the ECB taking on all the soverign (garbage) as collateral, which is just indirect QE.
Big question: At what point does the ECB (and Other cental banks) balance sheet expansion begin to lose creditbility?
They will lose it when the people and instutions turn there back on them. Revolution just like history has shown us many times in the past.
My fundamental view is more bearish because is the massive amount of debt/deleverging that will have to be delt with. I have been reluctant to buy this market because of the view of how can we sustain growth in this enviroment? It's not sustainible because peoples living standards are rapidly decreasing and are just trying to live. Buying discretionary items will be more difficult and difficult to do.
So basically theory is just buy all risk on any pull back, watch the credit markets closely and hedge accordingly if credit markets signifcantly deteroriate then you should be short risk. Then buy when central banks launch another bonehead program which they will continue to do.
As we come into resistance 1310-1320 spx it should be interesting. This move is getting pretty parabolic.
The always know realization that sucks to believe is that the powers that be control all, and will preserve the status quo at all costs even if it means financial and fiscal insanity.
It feel like the Fed is just outright buying futures and there just is no sellers. The other thing is how all the sudden we just stopped correlation EUR/USD moves lower and our market moves higher? DX Rising usually a headwind for risk assets, ever since LTRO the EUBSC (3 Month Swap) has rallied dramatically as obvious bank stress has eased at the ECB taking on all the soverign (garbage) as collateral, which is just indirect QE.
Big question: At what point does the ECB (and Other cental banks) balance sheet expansion begin to lose creditbility?
They will lose it when the people and instutions turn there back on them. Revolution just like history has shown us many times in the past.
My fundamental view is more bearish because is the massive amount of debt/deleverging that will have to be delt with. I have been reluctant to buy this market because of the view of how can we sustain growth in this enviroment? It's not sustainible because peoples living standards are rapidly decreasing and are just trying to live. Buying discretionary items will be more difficult and difficult to do.
So basically theory is just buy all risk on any pull back, watch the credit markets closely and hedge accordingly if credit markets signifcantly deteroriate then you should be short risk. Then buy when central banks launch another bonehead program which they will continue to do.
