The Closing Look
On Tuesday, the market ended lower after the Yen rallied sharply overnight. The Yen is considered a risk-off asset class and tends to do well when stocks (risk-on) fall. Economic data was light. The Consumer Price Index (CPI) was unchanged which matched estimates and continues to show inflation remains a non-event right now. Elsewhere, housing starts jumped to a 5 month high of 1.211M units, beating estimates for 1.180M. Even though housing starts were strong, building permits were flat which could be a subtle sign of fatigue.
Gary’s Thoughts: Was the market actually down? No way! Markets do go down. Utilities,reits,consumer staples act toppy,topping, topped. Utilities feeling the brunt most. These are the most defensive issues in the market. Not saying end of worl coming just they all have topping charts. Otherwise, just a pullback. We do make note that Soros looks to have remained very bearish into the end of the second quarter.
Well, we had our pull back, …..it lasted half a day.
Now what ?
My bet, the market is waiting on the fed next week..
Will the fed, or won’t the fed give the market it’s next feeding ?
So, we wait.
After the fed we are too close to EOM ( end of month ) window dressing to pull back.
Next best bet for a short is September, if even then.
We are moving into election season, and I’d doubt the banks will allow the market to make any pull back till after November.
Factors:
Hu mm,,.. By the rumor mill, Japan is getting ready to print again, EU, UK same.
If the fed hikes interest rates by .25 % and the markets try to pull back; Japan, EU, and UK can easily step in, and the carry trade continues, and the markets keep up the endless rally as the fed hikes rates.
Me, reading the mind of Jew’s Jew, (shadow fed chair) Stanley Fisher..
Is he willing to allow the markets to endlessly rally higher?
Is he trying to hold the markets here, without pull back ?
If the markets pull back on a fed rate hike, how far will he allow the markets to fall before he craps locks and bagels into his underpants, and races through the halls of the fed screaming “Print! Print! Print! for Baal’s sake ….”PRINT ! ”
At which time the market will go back up.
End communication.