The FED Balance Sheet / Market Timing Marks
It has been just over a year, October 2014, that QE3 ended and the FED’s balance sheet expansion stopped. While there is a lot of talk about a little rise in interest rates, I believe that key guide posts stand our in looking at the economy and the stock markets future.
- First the FED Balance Sheet at this date is essentially unchanged from a year ago. There was a little decline between November 2014 and June 2015, but it would appear that a little fear at the FED brought it back up into October 15 2015.
- That means the first guide post is what those balance sheet numbers do as we move forward. They will decline if the FED is doing more than blowing smoke.
- Market timing marks are the second factor to watch. Using the S&P Index the final topping indicators kicked off on 11/24/14 at a index level of 2071. That is a key level to measure against.
- The market topped on 5/20/15 at an index level of 2135.
- Our Macro Cycle indicators turned down on 7/23/15 when the market closed at 2102.
- The final indicator of the rollover topped on 11/3/15.