bull dollar losing steamdxy has had a full head of steam, and thats meant bear action for equities as well as crypto, but you can see thats lost the velocity required to maintain its distributive wave. if you look at uup shorts you can quite see the maxing out of the markets ability to price in new liquidity as in contract the dollar supply and increase equity or currency pair demand especially electronic networks like bitcoin that are tethered to dxy. i think this will lead to bear dollar soon.
Marketgauge
equity to gdp at extremesquarterly momo is bearish in spy, and equity to gdp ratio is at or near a vertex, or local minimum. if you look at the volume based oscillations there is mixed indication. if you anchor vwap at the breakout level jan 2014 you can see were sitting right on the top band exploring the idea of a monthly higher low. if that breaks things like equity/gdp, market cap/gdp, the buffet indicator (aggregate value or price to share to gdp) will need to converge more bearishly on the price. if we confirm weekly trend reversal then ill be much more confident in an spx broader recovery and maybe all time highs, but if we head toward 52 week lows i expect equity over gdp to test 1999 highs, and spy to test corona highs. its not unthinkable that spy is at 500 soon, but its also not impossible that we see 300 first. this shows that valuations are completely detatched from fundamentals, and thats not necessarily bullish or bearish but instead shows why things have been unravelling for a little more than a year. im sure a lot of that is coronavirus, and im sure a lot of it is just prices trending toward equillibrium.
discretionary to staple spendimg has reached a zentithwe are at a point where the use of credit to purchase staples has outpaced the use of cash to purchase other goods. the expense of debt in discretionary goods has reached an inflection point with the expense of transaction in basic supplies. the chart is at a high. the sell signal is in. count on the cost of goods being relatively cheaper, and that being bad for sales. bearish for broader market.
this is what is tanking tech, and the marketits really plain that this chart is not bullish. the last time we retraced over half a bounce we fell to the lows and made new lows. that means new lows for the broader market. i see an upside of 4% and a downside of 11%. i like selling any rip on large cap semiconductors by buying soxs.
consumers starting to spend less money againin times where this is above 2 consumer defensive is winning out, and in times where this is below 2 consumers are spending more money and buying consumer discretionary goos/services. recently this chart peaked, and now weve retraced and it is reversing again. probably going to set a lower weekly high, but qqe is long and sss is green so the defensive funds are probably the best bet in terms of consumer goods.
nyse cumulative expanding rangelosers/gainers looks like it has peaked weekly, but will show an opportunity for more longs after consolidation in the second half of the year
