TSP Charts: Quicklook 13 March 2019

Is the market’s bounce prior to working off over-bought conditions related to OpsEx week? Options expiration week has historically provided the market a tailwind and then the week after a headwind.

An OpsEx week bounce off 200-day MA

The 200-day moving average provided enough support to generate the bounce but the market is mired in overhead resistance and so the driver of the rally needs to remain in place. But what has been the driver?

Earnings? I don’t think so. Earnings growth for the 3 quarters of 2019 have turned negative. The economy? Well yes in a perverse way.

Since sentiment for economic growth is falling, sentiment for more free money flowing into the financial markets is sky high. Who needs future cash flow when central banks ensure financial asset prices go up using the “wealth effect” excuse. Their model tells them the 90% only spend more when the 10% get richer or something along those lines.

At least they are getting more honest about how it works in Europe.

So don’t worry about the global industrial recession. The central banks can protect the rich from market losses for a long time.

Or can they?

Why does Europe or the rest of the world matter to the SP500 companies?

So what happens when the central banks own everything because they print money and buy everything?

We may find out.

The question is why did the European Central Bank step into a dark room?

The answer was to follow the US central bank – the Federal Reserve.

I’m still trying to figure out how the stock market rallied with investor outflows.

I’m still thinking it was corporate buybacks after massive short-covering. Just a hunch…

So how much did corporations burn on stock buybacks this cycle instead of investing in capital, people, or pensions.

Well that explains the SP500 out-performance this cycle.

There’s so much more.
Join us before the party ends. 2019 is going to be an interesting year.

Invest safe, invest smart.


TSP & Vanguard Smart Investor

Categories: Perspectives, The Smart Bird

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