Fundamentals
On balance, the US economy is showing a degree of recovery from deeply depressed levels.
Retail sales have come back nicely and output levels have moved up some. My profits ahead
indicator reads -15.4 which is awful but not as bad as at the bottom in 2009. My business strength
indicator (BSI) is a lowly 107.9, which also exceeds the bottom in 2009 (A sound, healthy BSI
runs 140 -145). It remains very concerning that nearly 25 million people have lost their jobs and
that more recent data suggests that more upscale employees are being laid off. As the economy
continues to re-open, many more workers will be recalled, but the upscale earning jobs that are
lost will be very slow to comeback. There is huge slack in the economy, and even though raw
materials prices have been recovering, deflationary and default pressures will continue for a
while. The Fed remains just about fully accomodative, but Congress is juggling the ball here
on fiscal policy with an off-chance there could be a fuck up later this summer. So far, market
players have been letting the 2020 national election ride.
SPX Chart
The recovery uptrend from late Mar. was broken on a correction of a sharp overbought and the
SPX is now in a downtrend which is so early as to be inconclusive. The market is mildly over-
bought against the 200 day m/a, and the negative rollover in MACD bears watching. The
continued high VIX reading implies more volatility. DailySPX
