E Market Briefing For Thursday, Aug. 2

Quantitative Tightening has been a fellow-traveler with extended FANG (and similar equity) excesses; and while most await arrival of an 'inverted yield curve', or for that matter a penetration of the primary S&P uptrend; all that essentially will be after the fact in a chain-reaction process.  

Aside the early-year nailing of the parabolic thrust as a time to lighten-up a lot; and the only actual short-sale in the S&P (or seriously long VIX beyond day-trading); we anticipated a ragged pattern for months, primarily based on the 'structure' of passive-investing ownership/management these days; and believed this would forestall a calamitous decline.  

Hence we not only nailed a 'to the Moon if Trump won' preceding 2016-'18 rally; but warned of a form of 'distribution masked by FANG narrow-based concentration (small universe of stocks) leading a light-volume and ragged pattern, which I have labeled 'Rinse & Repeat' for some months now.  

Fine. However more recently we called for 'stability' to exhaust in early-mid July; setting up a vulnerable (and nailed) false-breakout led by Google just a couple weeks ago; followed by retrenchment back into an S&P 2810-20 range that preceded (and prevailed until now basically). So what changes?

Quantitative Tightening replacing Quantitative Easing has been a point I have made for some weeks; as it moves toward an 'inflection' zone that's likely to further inhibit significant earnings gains especially in this Season. It was ironic that I suggested the July stability would end concurrent with a talk I gave at TraderExpo Chicago (and it did); and now I'm departing for a few weeks (my annual sojourn) to Europe, and also expect a correction in that time-frame (and yes I do a majority of daily reports during my travels; although a bit more abbreviated depending on schedules).  

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Gene Inger 2 years ago Author's comment

P.S. This week ONLY prior to my departure to Brussels and Paris next week; all NEW Daily Briefing subscribers will be able to renew the ensuing Quarter and be refunded 100%. That means half price for the next six months; both due to reduced frequency of reports during my travels for 4 weeks, and during the most crucial time for this market. Visit www.ingerletter.com/subscribe to join us. This offer is this week ONLY and will not be repeated.

Gene Inger 2 years ago Author's comment

Gene is humble and proud to be the only guy not shorting and believing the S&P would go to the moon 'if' Trump won back in 2016. Now a bit more concerned but only from a cyclical not secular basis.