Below is a brief transcription from today's edition of The Macro Show with commentary from CEO Keith McCullough:
Yesterday Bloomberg ran a story that the Chinese were allegedly “slowing or halting” their purchase of U.S. Treasuries. This was according to “sources familiar with the matter.”
This morning the Chinese (i.e. the people who would know) said Bloomberg must be using the wrong source. In fact, China’s foreign exchange regulator literally called the reporting “fake news.”
There has never been a better time in history in which people had access to so much information, readily available on the Internet. But today everyone has a platform to communicate what they think, not what they know. All of those opinions might not be entirely accurate or true.
So what’s the truth about Treasuries?
What’s the truth about Bitcoin?
What’s the truth about politics?
What’s the truth?
To me, you know what the truth is? Last price.
Measuring and mapping price, volume, volatility. That’s the process and we’re going to stick with it.
Look at the S&P 500. Now, you wonder why “sources familiar with the matter” are making up fake news about the Chinese selling government bonds or whatever? It’s probably because they are short or not long this market on dips. On the news that the Chinese government was halting Treasury purchases yesterday, the S&P 500 had its first down day of the year. It was barely down. One day, it was down -0.11%.
On this down move, what did volume do? Did it accelerate? Nope.
That’s consistent with everything we’ve been telling you for about 14 months. On the down move we get decelerating volume. On an up move we get accelerating volume. The causal factor driving markets higher is economic growth. In fact, if you invested based on your own political biases or what you heard in the media you've missed a massive market move.
What does all this mean?
It means you need to measure and map economic data. You need to monitor the relationship between price, volume and volatility.
Most other things are noise.