POSITION: Short SP500 (SPY) and Short US Dollar (UUP)
The most important macro move in markets today is the lack of a reaction to the US Dollar being debauched.
With the US Dollar down over -1% on the day, and immediate term inverse correlations to the USD this high, you’d expect asset prices to inflate, big time. Instead, the US stock market has been flat to down for the better part of the day.
Why? Well, we’ll say this until we are Yale Hockey Blue in the face but, at a point, burning your currency eventually becomes a bad thing. Today had to represent the worst credibility day of the week for both the US Federal Reserve and the US monetary system at large. With less than a week to game time, to see the New York Fed announce to the world that they are taking a “survey” on QE is shock and awe in and of itself.
If we thought this would end well, we wouldn’t stay short. Immediate term support for the SP500 is now 1169. Tops are processes, not points.
Keith R. McCullough
Chief Executive Officer