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DrStool

Dump and Pump 7/20/20

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Today we have 20/20 vision.  Savor it as the dealers shake the trees.  And don't even start to think about the downside unless they take out ES 3185.

 tvc_e7ac2cf544afaa23a4c1df0a35aed209.png

 

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You didn't provide a link to the Macro Liquidity report Lee.  

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32 minutes ago, Jorma said:

You didn't provide a link to the Macro Liquidity report Lee.  

??? Looks there to me.  Which post? 

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22 minutes ago, DrStool said:

??? Looks there to me.  Which post? 

Ah. It's there on Liquidity Trader but didn't copy to WSE. Sorry. 

Thanks for the heads up! 

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Several banking indicators have exhibited a mild trend of deleveraging that has now persisted over two months. What we don’t know yet is whether it is just a correction of overborrowing during the initial phase of the pandemic and the Fed’s response.

Or is it the beginning of a persistent trend of deleveraging? That’s important because if it is the latter, it would have the power to change the direction of stocks

That could be a good thing over the long term. But it could also lead to another accident in the shorter term, over the next few months.

Unfortunately, so many aspects of this are uncharted waters for us. We can’t look at history and say, oh, this is just like that, or even something like that. We must take our best shot based on the logic of the current circumstances. Another problem is that, while economists assume that humans are rational actors, we know that that’s not often the case. We have to figure out how humans are most likely to behave, rational, irrational, or otherwise.

Ultimately that boils down to divining the trends in the data as it exists. Let’s just look closely at what we know and ask a few questions. Is the current trend persisting? Are there conditions on the horizon that might lead to change? Is change already underway? What are the signs? How will the Fed respond? And more importantly, how long will it take the Fed to respond.

Fortunately, the last two questions don’t need an answer. Because the Fed doesn’t know what it will do until it does it, neither does the market. And it’s likely to take the market longer to figure it out than it takes us, if we’re paying attention. Which we are.

Here’s what we know and what to do about it.

Subscribers, click here to download the report

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Momentum is shit on this rebound. 

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Momo has perked up but still nothing to write home about. Who wants to write home, anyway? 

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5 day cycle projection 3255

tvc_08cccda55cc2f7d6f0e3521a9eb45b92.png

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Hard to believe, Harry. 

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Godawful day. 

Trump is sending the SS to Chicago, and threatening to send to Philly, New York, and elsewhere.  This is designed to ratchet up the violence for a  pretext to declare martial law before the election.  

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