Keep Dancing - Bananas For All!

Keep Dancing (while the music plays) Banana added to blog post for effect :-)

FOMC came, FOMC delivered what we knew they would, FOMC left and the machines drove the markets down and up for a couple days, leaving the situation largely as it had been. NDX near its highs, SPX holding the support of its EMA 20 and DJIA thus far successfully testing its moving average convergence (SMA 50 & 200).

As a bonus, Tech leadership (NDX/SPX) remained fully intact and the Semi sector may actually be firming again vs. Tech (SOX/NDX). In other words, it was another week of worry and angst outside of the markets (as the virus rages and the economy tanks) but stock prices only care about what monetary and fiscal authorities are doing to the money, the real funny munny.

It is impossible to know when the party will end, but those dying to be bearish today and every damn day since the February-March correction may want to stop thinking in linear terms, extrapolating outcomes from the past to the current situation. Policymakers are in full MMT TMM (Total Market Manipulation) mode and stocks are denominated in munny units. With where we are headed, what does money even mean anymore?

We are in a world where this tweet can actually be put out there in all seriousness by a political figure. I understand that there is a social and economic disaster going through its progressions and there is no effective solution. But it’s a matter of pick your poison. The Fed is attempting to fill a void that would be left by ideologies like the one tweeted here.

And it’s not just this congresswoman. Trump had been haranguing and hectoring Jerome Powell for a variation of the same thing since well before COVID-19. What do you think 0% interest rates are? They are a sign of consumed seed corn and of desperation.

But stocks don’t care. Pick the right sectors and feel prosperous for a while longer. They are burning the funny munny and stocks are denominated in that munny. This is the same argument I’ve been making since the March disaster.

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