As mentioned over the weekend, regarding the current short put on with Monday’s open, if you are working the regular sell signal, good for you. If you working the Bailout signal, you will want to go flat on the open today or shortly thereafter. Further action should be taken, which I will get to shortly.
The Fed’s decision not to raise rates yesterday, indicating at least a temporary respite from rate hikes, is further fuel on the bear fire.
My data shows inflation is finished - and may even go negative as there is presently, no bottom in sight on the current drop in inflation. The number one indicator I know that points to what the future direction of inflation is, is the NY Fed’s very own “Underlying Inflation Gauge” or UIG. Although the latest monthly data point will be released tomorrow, until this thing bottoms and turns up, we can safely assume inflation is abating:
And looking deeper into the numbers, with M2 continuing to contract as it has, we may see both UIG and CPI with a long way to go on the downside yet:
Falling rates, as we see, historically, below, with the broad market in black and the discount rate in brown, are typically correspond to bear markets:
All in, it looks like rates have peaked out for this cycle, which is very bearish, longer-term, indeed.
Now, for those of you following the Bailout system: