Here is the weekly view of the S&P 500 with its stories to tell.
Story #1: The uptrend is intact and this bull market has screwed the shorts on 3 occasions now. Whereas in the last 2 decades when SPX would cross its weekly EMA 20 below the EMA 50 the result was a rapidly oncoming bear market, the occasions in 2011, 2015 and 2018 were bear traps. Fact, not opinion.
Story #2: The SPX/Gold ratio, our Amigo #1 from last year’s 3 Amigos shtick came to the upside target as noted in this link and has topped out. Right. On. Schedule. That is counter-cyclical macro signaling and it is not good.
Story #3: The declining 3 mo. T-Bill yield has usually been a counter-cyclical sign as well. It has started to do what it did at the beginning of the previous two bear markets. So Beuller, what is different today than at the 2011, 2015 and 2018 false bear signals? Anyone?
Story #4: The yield curve, our macro Amigo #3 was playing ball perfectly for most of 2019 until the FOMC did not go as soft as the market apparently wanted it to at the end of July. Welcome to the inversion and all that media hype about recession. A flattening and even inversion of the curve go with the boom, not the bust. When the curve starts to steepen we will either bust the stock market and the economy or it will labor along under the burden of increasing inflationary fears.
So those are the stories a singular chart seeks to relay. Consider them, ignore them… hey, I am just a guy writing my thoughts with the aid of a picture. But consider them. Okay?
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