Thursday, November 24, 2016

Now we chill out waiting for the reversal

We hit the top of the big megaphone, we're still hearing this stupid narrative that $1T of infrastructure spending now will somehow give us inflation, after all we have thrown up in desperation thus far.  Of course, the inflation already happened, over decades, so to expect it now is just insipid or deceptive.

At some point the headline makers will figure out that Trump's infrastructure gambit is an effort to trade debt for concrete things (as opposed to financial industry graft), while we still can.

The 35-year bond bull has reached its terminus.  Now we get to experience reality again!



Once we go, all the chart destinations for support and resistance fall into place.  The Italy referendum is the next big hurdle.  Burn down the disco.

SPX 5Y

20 comments:

Christian Gustafson said...

Happy Thanksgiving, you stolid mooks. I think I'll go boil some potatoes I dug from Mother Earth last week.

Hugh Jazole said...

Agree 100% about inflation. You can just see them beginning to spin the inflation narrative. They even drug out the old corpse in a suit Greenspan a while back, to "warn" us about the impeding inflation boogyman. Also notice the ridiculous ramp in copper the past week, yeah that's sustainable. They're hoping, PRAYING for inflation, but it will elude them. There may be a bit more juice to squeeze out of bonds, in the short/mid-term. We'll see. The wife and I had braised lamb shanks, with pureed parsnips for Thanksgiving. Washed it down with some Belgian Ale, Chimay Blue. It did not suck. Happy Thankgiving CG.

Bryan Franco said...

Happy thanksgiving. It would be odd to have such a bearish December. But this year has not exactly been normal.

Christian Gustafson said...

Italy and the FOMC rate hike -- what's not to like?

Hugh Jazole said...

Any thoughts on this recount nonsense?

Christian Gustafson said...

Market looks great today.

Bryan Franco said...

Any evidence of a move like this not being bought to new highs after the first significant dip? Look at the Russell. Freak show.

Bicycle said...

Fed is getting a huge gift here they should be doing emergency hike of 1-200bps in dec

there is a megaphone on the Russell, we are in e wave, could mean SPX ix headed to 2373

T.Berry said...

cg, I totally agree with your call on rate hike, janet, bring it! the s&P is up over 8% since the last time she raised over 11 months ago. another hike and the s&P could be sitting 2400 in a year which is where I think it goes next year( can you picture it :) )_.

lost track of the # of aths since don won. although 401ks are at record all time high levels and american's are the wealthiest they have ever been. home price back to 2007 all time levels. still say this year is best ever for holiday sales (mostly online acct for the records)

hope all had a great and safe t-giving. 2017 is going to be here in no time.

johnElarue said...

We've been trading debt for concrete here in Jpn for two decades now and we don't even have the reserve currency, just a safe haven..whatever that is. I lik to play a game called count the potholes when I drive, the thing is I never see them. Go back to the states and it's like a frickin war zone , the roads and bridges, holy hat.

Hugh Jazole said...

Maximum dystopia?

http://www.npr.org/sections/thetwo-way/2016/11/27/503502142/people-donated-nearly-100-000-to-dig-a-big-pointless-hole-in-the-ground

Hugh Jazole said...

Utilities finally jumping onboard. Super bullish in the short term.

Hugh Jazole said...

OPEC cut! This should shake things up a bit!

Ken Barrows said...

OPEC is dead.

Bryan Franco said...

The 'resets' continue. Unabated

Bicycle said...

slow burnin wood in the Smokies these days, ayyyyyy

Hugh Jazole said...

Stocks down, dollar down, bonds down. Long gasoline!!

Bicycle said...

that last high on the nasdaq was the tech top, the final e-wave of a rising wedge going all the way back to dotcom days.

when it cracks 5k again (it will be soon) it's heading thousands of points lower

Bryan Franco said...

$NDX ... Multidecade double top

Hugh Jazole said...

Caldero on bonds.

"A rise in long term yields does not usually affect an economy much until there is an inverted yield curve. This occurs when shorter term rates rise above longer term rates. When this occurs borrowing becomes more difficult, and within about one year an economy begins to contract. The last three inverted yields curves occurred in 2006, 1999 and 1989. Recessions followed in late-2007, 2000 and 1990, which were the years of stock market tops too. The current spread is about where it was in 2014 and 2010, and nowhere near an inversion."