Crazy markets these days...
But, we all know at least two things:
1) Economic conditions are bad enough to send the US stock market through the floor, and
2) It is foolish to bet against the Fed, and if the Feb keeps printing money at a record pace, it
will be hard for the markets to fall.
It's not worth going over this again, but you can get the general idea from our previous blogs.
So, what do the tea leaves say now (see graph below) ???
1) In early July, the SPY recovered from a fast (but rather small) correction and then bounced off
of the bottom of its 50-day EMA for 5 days (purple box) before heading up (orange circle) and then reaching new
2) After falling below its 50-day EMA for the second time a week ago, the SPY has again bounced off
its 50-day EMA for 5 days (2nd purple box); and again, it appears to have stuck its nose above the
50-day EMA (orange circle).
3) Of course, if the bulls can get a strong break-out to the upside at this point, we could see more new
highs; but if not, things could get ugly fast.
Instead of guessing, it is best for us to depend on MIPS to tell us what to do, and when.