—-The DOW and S&P are on the verge of breaking out of a big range starting way back in early 2018. The stronger NASDAQ/NDX are on the verge of breaking out of range that started last August. If this occurs, we would think it would be somewhat akin to the breakouts in the first week of 2013 and the breakout the week of the November 2016 election. This would not include many areas as small caps, mid caps, transports, foreign markets, financials are not even close. This would be a big difference from those other breakouts.We would also expect the dollar to swoon and gold to get going out of range. As always, with markets, we will adjust if new clues show up but today looks to be an important day and will be imperative the market does not experience a big reversal.—–
—-And to repeat from last night’s report, this is all occurring because:—-
Negative Bond Yields through…
30 yrs: Switzerland
15 yrs: Germany, Netherlands
10 yrs: Japan, Denmark, Austria, Finland, Sweden
9 yrs: France, Belgium
8 yrs: Slovakia
7 yrs: Ireland, Slovenia
6 yrs: Spain
5 yrs: Portugal
3 yrs: Malta, Bulgaria
1 yr: Italy
——In Switzerland, you are paying the government to loan THEM money…and for 30 years. Who in their right mind would do that? In recent weeks, we have seen India and Australia lower rates. We have seen China add over a trillion to their system, Just this week, the ECB announced the potential for more rate cuts and more printed money even though their rates were already negative and they have already printed trillions.—–
—-And then there is us. Let’s see…—-
—-U.S. Large cap indices are back near all time highs.
Unemployment is in the 3s.
GDP was 3.2% last quarter.
Oil prices are dropping helping the consumer and business big time.
The 10 year is yielding 2% making mortgages much cheaper for the average American’s largest purchase.
80% of IPOs that have been coming out have losses, some with huge losses.
Froth is showing up in the market. Think fake plant-based meat.—-
—-With all that, one would expect a central bank would be tightening. At least that is what would have happened back in the good old responsible days. But instead, from Jay Powell:—-
—-Needless to say, we remain in unprecedented…and we mean unprecedented easy money times…as the debt/deficit/leverage can these central banks have enabled gets kicked even farther down the road.—–