The people who have enabled/created all the leverage, debt and deficits are at it again.

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm

So just create more money out of thin air. The kitchen sink and the kitchen now thrown in.  Just know we have been highlighting for years that every time markets would get in trouble, these same people gave the world easier money. We doubly highlighted what Powell has done since Christmas 2018 until recently. Our quote that “there would be no amount of printed money too high and no number on yields too low” has come into play. Yes…the problem is still everyone’s solution. The fed created this web that we are all in.

Yes…we know the virus. But we believe there is no way it would have been this bad if central banks stayed out of the way and politicians actually respected the tax payer by not running massive deficits. But we will never know this.

Futures have rallied from down 800 to up 600. As we write this, the DOW is up 300+.

We are now hearing the administration is thinking the cure is worse than the virus. The president just put out this tweet:

“WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!”

Many believe the reaction has gone too far. We do not think them wrong. We do not think them right. We will just leave you with our same thoughts: THE VIRUS IS THE ECONOMY NOW. THE VIRUS IS RUNNING THE ECONOMY NOW, RIGHT OR WRONG!

We can rifle off all kinds of record bearish sentiment numbers. Eventually, there will be a big short-covering rally because of those numbers and because of how stretched markets are to the downside. Expectations that legislation will also come sooner rather than later to backstop industry may move the needle. Maybe that will do the trick.

Since hardly anyone reports this, we will:

The Treasury (our tax dollars) said net borrowing totaled $488 billion from January through March, a record for that period and about $47 billion more than it had previously estimated. Think about it. Those wonderful human beings in DC from Ryan, McConnell to Pelosi, Schumer had to borrow nearly $half trillion IN JUST THE 1ST QUARTER to fund their bull crap. But nothing here to see.

Also, the Trumpster has given extensions to certain countries on trade tariffs. We expect more of this, not less as even the President knows these tariffs are bad.

Two days in a row of negative reversals. Markets opened another Monday in a flurry only to finish at the lows of the day as the boys sold into the close. You know what that means to us. On top of that, good earnings have sold off and good earnings have reversed strong opens.

Major indices remain in the back and forth we told you to expect. You can notice NASDAQ rallied right into the 50 day before selling off.

SEMICONDUCTORS continue to swoon selling off badly throughout the day. This occurring even though they are stretched, extended and oversold to the downside. INTEL (INTC) gapped up on earnings and reversed Friday and continued down yesterday.  MICROSOFT (MSFT) also gapped up Friday, sold off but still finished up…but sold off hard yesterday. AMAZON (AMZN) also reversed its big gap Friday and again reversed good gains yesterday.

We expect more of the same…back and forth, driving everyone up a wall. It is at these times you should take a step back and recognize it for what it is. As we have stated several times, after the big move of 2013-2014, the market consolidated those gains for 18 months with two big teases to the downside but both never took us into what is defined by most (20%) as bear market territory. That said, there were some rolling bear markets as the RUSSELL went into the 30s.

We continue to watch the long term support levels we have outlined for you. So far, they hold strong but every down day, every strong open only to reverse…deteriorates the technicals and adds more termites to a market that has been chipped away at.

Patience is your best offense right now.

Futures, for a change, hardly budging.

A few thoughts in and out of the market:

Immigration:

Not one person will be deported out of DACA. Not one.

The coins:

Kodak (KODK) announces a coin. Goes from $3.10 to $6.80 yesterday. Trading at $11.50 this morning. But there is no bubble!

Notice many of the other “questionable” blockchain/coin stocks have been slaughtered. Do not be the last one in.

Trump:

That was one hell of a one hour meeting in front of the cameras yesterday. That was Trump telling all the famed psychiatrists like Dr Mika and Dr Joe that everything is fine. As always, you decide.

Tax bill:

More and more bonuses. More and more wage hikes. More and more investments. While, as we wrote yesterday, a company like Tim Hortons takes away because of mandated higher wages by government. Repercussions!

The markets:

Continue to watch COMMODITIES. Energy, oils, steel, copper, aluminum, palladium…all continue to soar. Gold and silver also getting a bid. Energy prices are at 2 year highs. We have been told the ultimate outcome of all the central bank nonsense of printing of trillions, negative rates and 0% rates for 8 years has to be a good bout of inflation. Has not happened yet but always keeping one eye out as we do not believe economics 101 is dead…regardless of central bank interference.

Watch long rates. On the verge of breaking out of near-term range. If successful, watch 10 year head towards 3%…the highs going back to 2014.

Sentiment and complacency remain at extreme levels while major indices are at extreme extended levels. Just saying! Also, just saying…we will get a correction eventually. No really.