A Bit of a Tired and Scared Market…

Today in early trading we are seeing a number of things come together. Markets, especially AI related stocks are in an elevated state. Looking deeper we see the players, the traders, continue to run scared. This is based on our “animal spirits” index which has been in retreat since its August 25th recent high, when incidentally the S&P was down in the 6440 area. Bottomline, traders in total have not captured all of the last 7 percent of the rally. Sure, they caught some, because they are enamored with AI, but they are missing the basics, whenever we have a selloff, they sell the Russell, not AI.

All this is happening while our Monetary Multiplier is gaining strength, Gold is in a small retreat, probably a 3600 to 4100 range for the next few months, the yield curve is steepening, and interest rates are headed lower.

And then we are also looking at some interesting tariff stuff. The Supreme Court is looking into things, and today’s election will be a factor into which tariff direction may get a warning. All in all, if either of these things click, paying back tariffs would provide a stimulus effect.