It’s About so Many Things

What are we talking about ?

The market decline over the past 9 days.

First what CNBC and other market media likes to say, it is about the fact that the President and Congress cannot agree on further stimulus. That no doubt is part of it, but by no means the biggest factor.

So what factors are involved?

Probably one has to first look at the macro factors that overhang the market, all the inefficiencies that have built up over the past 40 years and were accelerated over the past 4 years.

Secondly, one has to reckon with the fact that the macro market already had topped out 3 times between early 2018 and early 2020 and got rescued each time by the FED. How many times can they do this before they really put it on a solid track. Yesterday’s comments on the FED provide a little insight.

There is the market rally which ended recently based on hope and manipulation and a belief that the Old Normal is coming back.

And then there is the PANDEMIC, and the fact that it is being handled by an amateur. It appears likely that we are in a lull, right before things get really grim.

And lastly the election appears to be foreshadowing some big changes.

And about 50 more things, which I don’t have time to list today.

I will post an update of the MACRO signal chart as soon as we get the downside breakaway out of the top formation.