A Bit of Room

Important tops are accompanied by clear changes in market character. We'll need to see right away the ability of stocks to link multiple weak sessions in succession. That's become foreign behavior in the era of the money printers. A true bear market will need to see an end to the relentless pounding of volatility.


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Do Spirals Still Work?

Or do the MoneyPrinting Pumps trump all?


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The S&P has disengaged from the EURJPY rate. We had speculated before that the EURJPY rate was in turn driven by the ration of BOJ to ECB balance sheets.


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Interestingly, while US stocks have disengaged from that EURJPY rate, they remain closely tied to the ratio of the balance sheets. In fact, the ratio of the BOJ to ECB sheets has risen sharply recently, right in line with this strong S&P rally. The suggestion here is that Japanese printing is still driving stocks, even if the relationship with the EURJPY exchange rate has broken down.

Continue reading Do Spirals Still Work?