It’s Vacuum Time
As of last Friday the market has entered into what I call Vacuum Time. This is the time when market technicals are at a crossroads. A time when a Macro High or Macro Low makes an extreme turn and then the market has to wait for confirmation, like simple 50, 100, and eventually 200 day moving average turns.
I see it as a time to ponder fundamentals. It is obvious at this point that the market rise out of the March 2020 Pandemic lows has been based on government stimulus, both FED and Fiscal programs. Money supply has grown dramatically, yet there is a Red Flag out there, money velocity, Money is not being used aggressively, with much of it apparently being parked in trading accounts pushing market type assets into high valuation metric areas. This activity does not produce stable production numbers.
We will be adding both fundamental and technical analysis as we see see it develop going forward.
A little update at 10:00 AM CST on our Long Dollar trade. We have been stressing the long dollar fundamental position since last December.
Next here is what we are watching in terms of a bigger view, the Love / Hate trade, long dollar and gold (gold being a laggard in this early phase, will catchup as panic sets in) and Short Fang stocks. We are in the very early stage of this contrarian trade.