SPX | Waiting For The Miracle To Come

업데이트됨

This year has been very boring... Lot's of horizontal movement, not many interesting news.

Well, except of course that "a couple" of banks went bust.
But if I didn't tell you that, you couldn't tell where in this chart this occurred...
SPX, and the market in general, has been too stubborn despite the importance of the events occurring.

On the one hand, this makes sense. This kind of crisis (banking) has come before, so the markets are calm. A crisis comes when nobody expects it to. And by design, a crisis is an unknowing event of unknowing consequences. A bank going bust is not frightening anymore. The market expects the FED to step-in and bail everyone out.

But the FED cannot possibly bail anyone out. They cannot print any more money (we might have reached a debt ceiling), and even if they could, they could be unwilling to print more money. Inflation will get worse.

So no more money.

Dollar has served as the worldwide reserve currency, until now. China amongst other powerful nations, collaborate into creating an alternative reserve currency. One that will be controlled by them, not by a panicking (?) FED.

The FED might not be panicking, even if we believe that they are trapped. I believe that they have very good knowledge of what they do, and of the repercussions. Absurdly high interest rates can be a mechanism to increase the dollar purchasing strength. And you need purchasing power when you have enemies (Russia, China etc.)

Since 2015, this has worked out tremendously well. The Dollar is making higher highs.

Of course, there are many fundamentals (like the Dollar Milkshake) that push the dollar value to new highs. But interest rates are interest-ing (hahaha) to the Dollar.

And the Dollar is winning battles against many countries of the world.

And with lower money supply, it's value is fated to increase even further.

(I like real reality, not augmented reality, that's why I used M2REAL instead of M2SL)
The money supply is vacuumed back into the printer which created it. And the power of the vacuum is not big, it is exponential.

The Dollar Milkshake Black Hole is now open.

But how much can the FED possibly hike?

The discrepancy between the FED's rate and the Market's rate is at it's highest level. The FED may not be able to hike any higher against the market's expectance. Who knows what will happen if the FED overcomes this limit... (is it even fundamentally possible?)

Inflation is high and it is fated to increase even more. I have posted about it extensively.

The preview of this chart idea is broken, oops...

Now, oil is looking substantial signs of strength.

Oil, the main inflation influencer, is showing significant signs of bottoming. Furthermore, it has retested a trendline that followed us since 2008. Long-term, the only way for Crude is up!

And the only way for equities is down! Just to reach the mean, the OIL/SPX ratio has to increase by 75%. So there is much room upwards for commodities...

Have you realized what SPX has shaped into?

Could this be the anatomy of a bubble? And has it already broken?

It seems that the recession is only now just beginning.

During normal times for the US economy, equities could grow even as yields were increasing. Now we are entering a period of weakness for the economy. Something has to give, either the equities go bust, or the yield rates. (Equities have much more room to drop than Yields do)
A crisis is definitely inching towards us...

A final chart for today:

Equities used to grow as money was created. Now this chart has immense dynamics to move downwards. In a sense, equities have MUCH room downwards, even if money gets created. This comes to prove that equities cannot absorb any more money supply. Money printing from the FED cannot possibly help equities, no matter what they do, they are trapped inside the bearish wedge. Only way for equities is down!

And similarly for SPX

Tread lightly, for this is hallowed ground.
-Father Grigori

PS. What could these charts mean? Are they of any meaning after all?

A crisis is definitely itching towards us...

I HAVE to test. All the time. Or I get this... this ITCH. It must be hardwired into the system or something.
-Wheatley, Portal 2

코멘트

I hear some of you say, and rightfully so, that the big crash will come when the big money sells out. In reality, the big money has already sold out.

In the last few couple of years, as money went scarce, big tech equities couldn't increase fairly. To combat increasing rates, cheap derivatives came into play, and replaced the expensive stocks.

So, with the immense money supply that was printed in 2020, Big Money had the funds to cash out, and left us with the bubble. They sold the real stocks, and replaced them with fake derivatives.