The Punch Bowl Has Moved

Posted on Apr 10 2015 - 9:47am by Sharpe Trade

We continue grinding it out in U.S. equities.  We’re peeking a bit higher at the time of this writing.  We are up 1 whole point.  Weeee.  Though to be sure, the meat-grinder will not last forever.  At some point, equities here in the U.S. will begin a sustained rally.  Of some sort.

But alas ladies and gentlemen, I am afraid the ridiculously wild drunken fiscal stimulus party of the last seven years has moved on.  The Fed has been flickering the lights on and off for some time now, signaling an end to the party in the United States.  But do not fear.  The party will not end.  Word is being passed around.  We’re just moving it down the street.

Pass it on.

The Europeans watched from afar, and grew jealous of the U.S. Apollo-to-the-Moon-stock-market-rally-program.  As they begin their own version of what I suppose we’re calling forever-monetary-stimulus (but then again if we ask President Drahgi, it is not indefinite in time, but it is … but not really … but sorta) the FTSE has enjoyed a steady rally this year …

FTSE 100 Index – Daily Chart – 2015

FTSE 100 Daily

Data and Charts: tradingview.com

Money flows ladies and gentlemen.  It is is never ‘destroyed’.  It simply flows from one area, to another.  And it seems now the party and money is flowing to Europe. 

What am I watching this morning?  Well, for starters, EUR/AUD as a currency cross.  Because as I mentioned in my stock-twits stream, I am still short that sucker.  But primarily, I am still watching the 30 year bond to see if we can drop lower to hit higher yields this Friday.  If we do not break lower on the 30 year, then expect more ground hamburger from U.S. equities …

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