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Friday, November 27, 2015

Daily update 11/27 Tightening credit?

Oh. Hmm.  Sorry.  It think I fell asleep.

It appears that 2089 has a very strong magnet.  That was an entire week of nothing.

This morning the futures closed the 10 AM bar below the 20 SMA, but the bulls came to the rescue.  However, all they could do was get them back up to the bottom end of the resistance zone.  Will the resistance zone or the 20 SMA fall first?

This chart shows the potential for trouble.


There was a little bit of tightening after the mini crash in 2011.  However, that was short lived.  With the FED threatening to raise rates this time instead of the operation twist they did in 2011 things might be different this time.  If banks tighten long enough there will be a recession.  This round of tightening is likely happening because of the stress in the junk bond market.  It looks like that market is likely to get worse instead of better in the near term.  Default rates are rising somewhat.  It is nearly impossible for our debt laden economy to expand without an expansion of credit.  This clearly bears watching.

The market and status pages have been updated.  Have a great weekend.


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