Picture of a daily chart ... money flow is still pointed down as well as the green price indicator. Today's market brought $1.5 billion of cash inflows and we had a 68% up volume day. However, volume was very light. If we do not pick up some buying on HEAVY volume ... we just may see the bottom fall out of this market in the second half of the year based on the unemployment numbers. I talk with several business leaders each week around the country and they all tell me the same story of how bad current market conditions are out there. If the unemployment numbers continue to move higher and stay high for a period of time people will have fewer dollars to spend on consumer items thus mitigating overall aggregate demand. Something I'm currently experiencing with a business I own today. I get it, I'm feeling it and I'm seeing happen with other people.
It has been a few days since I've posted the next two charts. Here is a look at the daily chart for the US Dollar. The price trend is still pointed up as measured by the green line (function of price and the direction of the intermediate cycle). I believe this spells trouble for the equity market.
Junk bond market has weakened over the last few days ... but it looks to be making a near term bottom ... do watch out for the blue line above ... it is a measure of money flow and it has turned back down. When the junk market turns down in price ... the market has followed in step in the same direction.
No comments:
Post a Comment