No new highs, no new lows, lots of chop and still no decisions on anything. New highs or not, trade deal or not, hard Brexit or not, the list goes on and on.
Bulls remain undeterred and confident that an ever more aggressive and interventionist Fed will bring the ship home to new highs, while economic and earnings data continue to show weakening as evidenced again this week by negative retail sales, negative industrial production and the New York Fed Nowcast dropping to 1.04% real GDP for Q4.
Yet markets again closed north of 143% market cap to GDP (Hitting the Wall) as another Opex week managed to crush the $VIX again while the Fed commenced its $60B per month treasury bills buying program.
So it remains a battle between artificial intervention and macro data signaling a rising recession risk:
Yet despite all the intervention a potential new theme has emerged. Whereas in the period of January 2018 through July 2019 all new highs have been sold, since July 2019 markets keep making lower highs.
Bulls still need to prove their case as do bears. Hate to break it to everybody, but this market remains divergent with a potential double top in place but no breakdown either:
In today’s video update I’m discussing both macro and technicals to give a as realistic as possible overview of the current state of markets:
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