Stock Market
The SP 500 made a new cyclical high near 1242 today, but NYSE breadth and my buying
pressure gauge are not confirming this high. The NYSE TRIN index did show strong
buying pressure over the past two weeks, but the non-confirmation of breadth suggests
there are sectors and issues that are overbought and are holding back the broad market.
Watch carefully in the days just ahead.
Monetary Policy
I'll skip doing a FOMC wrap since such will be all over the web. But I did want to note that
my interest rate policy gauge has slipped from a 50% chance the Fed will raise rates soon down
to 25% on a weakening of non financial commercial paper activity. Now, although both short
term business credit demand gauges are now negative, they are in basing and bottoming patterns.
Thus, if the economy broadens in recovery momentum beyond stronger retail sales in the
months ahead, we'll need to see if business credit demand reverses to the upside. Make a note,
as such developments would likely wind up giving me a reading of 75% in favor of raising
short rates and set off Street chatter that the Fed is falling behind the curve.
No comments:
Post a Comment