A pair of buy signals suggest this stock correction is over.
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Category: Money Printing Pump
Visible Taper
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The FED's taper was supposed to begin in December. It's just now showing up in the Money Printing Pump chart.
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Weakening internals suggest some vulnerability here.
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.
Monthly Recap
A look at May's madness.
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The euroyen S&P correlation is disengaged.
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Stocks ignored the seasonals in May, to put it lightly.
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The Gold Solunar Model is looking for two more months of declines.
Disconnect
Around the Merry-Go-Pump
Printing presses VS. Cycle.
The FED printing presses have won recent battles. I'm not sure they'll win the war.
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Underway
The May swoon forecast by my Solunar Model is officially underway.
The Failing Japanese Printing Press
Our clients have been following the close correlation between inflating central bank balance sheets and asset prices. Here's a few charts with some interesting implications.
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For some time now, the S&P 500 has correlated closely with the EURJPY exchange rate. The two have danced hand in hand, although note that in the January stock correction, the EURJPY headed lower before stocks turned down.
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In turn, that EURJPY rate has a long-term fit with the ration of Japanese central bank assets divided by European central bank assets. This relationship makes sense. If the Japanese are printing more than the Europeans, their currency will fall relative to the Europeans.
The chart that brings it all together is below for subscribers.