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If This is the Up Phase... 4/13/22


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I can't wait to see the down. Indeed, yesterday's double bottom looks like the 5 day cycle low I was expecting. But the up phase has been punk so far.

When up phases stay flat, the down phases that follow usually have one of two common paths. They either stay flat too, as the market loses all impetus in both directions. Or the down phase goes down hard and fast. In other words, a crash. 

Which will this be? I think the key level this morning will be 4454 on the ES S&P futures, in the opening hour of New York trading. If that's cleared then there should be more upside. But a rollover below that trendline at any time would be a sign that we should expect something more dramatic to the downside. 

The key sport level is actually a little below yesterday's low. The trendline at 4375 looks to be a potential inflection point. Either it bounces from there or above, or we go much lower later today. 

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Liquidity will be bullish starting Thursday when the Fed's MBS purchase settlement week for this month starts. But right now, it's not bullish yet. Next week the T-bill paydowns that have already begun will start getting even bigger. The market will be awash in cash in the last two weeks of April. Read all about that and stay on top of what really matters for the big picture here: https://liquiditytrader.com/index.php/category/monetary/

But wait. There's MORE! 

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Ciao! I'm heading out on this gorgeous day here in Cannes. I'll see you this afternoon US Eastern time.  
 

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This is an update to yesterday’s inflation news to include today’s news on my favorite inflation measure on the chart. That’s the PPI, Final Demand,…

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