Massive Rotation

As the market tries to make sense of the big question, the debate between Hot Inflation and Developing Recession, things are getting interesting.

The first reaction which started yesterday and makes the Pivot value for Monday 1/2/22 close as important as the last Pivot day close 2/23/21. Yesterday the market players started moving out of Tech and rolling into value, infrastructure, mainstreet, and finance stocks. That makes Tuesday’s lows on those sectors very important, we will keep you on the mark on those points.

Obviously the CPI, PPI, and PCE inflation numbers next week will be important on the inflation / interest rate picture. So far we are seeing crosscurrents on important measures, like between junk bonds and 30 year bonds where the short term picture shows relatively weak junk bonds while the long term picture shows relatively strong junk bonds.

In summary, the Macro Bubble is Collapsing, all that I mentioned above is just to provide a little context as to how a huge pile of trader money is frantically trying to hold on.

Here is a chart that shows the money pile and what it is doing. This arithmetic index chart is comprised of all the market values of major stock indexes, short and long term bonds, gold, bitcoin, commodities, and real estate. What is important is that the rally that was touted as being the Melt Up from the December 20 low is unravelling.