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Tuesday, September 20, 2016

Daily update 9/20 U.S. Household Finances – It Only Looks Like the Good Life

 This appears to sum up the week so far.


The strong start/weak finish pattern repeated again.  SPX tested up into the 2147 resistance area again and was turned back immediately.  Breadth ended -54%.  Are we running out of dip buyers?  New highs came in at 31 while new lows ticked up to 25.  The consolidation continues.  The bulls are giving it a good try, but to no avail so far.

The futures popped out above the upper trendline again today, but the result was the same.  This time they closed back below the 200 SMA unlike yesterday.  This looks ready to go down now.

The red count started up today despite SPX ending flat.  This looks like the down move is ready to continue also.

If the central banks don't save the market tomorrow I think we are ready to head down again.  While the FED is not expected to raise rates there seems to be a lot of questions surrounding the BOJ.  Maybe tomorrow will move us out of this consolidation one way or the other.

This is an interesting read from a former FED insider.  U.S. Household Finances – It Only Looks Like the Good Life  The intro from the author's web site is pretty interesting also.

It is with great pride that I introduce MONEY STRONG. After nearly a decade at the Federal Reserve, I find myself compelled to help educate large and small investors alike about the inner workings of the institution that so captivates the media and Fed watchers. My goal is to shine a bright light on how policymaking within the Fed directly affects not just those on Wall Street, but every citizen of this country, and for that matter, the world.

We stand today at the precipice. Will the Fed ever normalize interest rates? What of other central banks trying to counter any potential tightening? Will there be consequences for this $12 trillion global experiment?

Perhaps what resonates with me most is that nearly 30 years on, since the birth of the Greenspan put, so few lessons have been learned. Money is strong when grounded in investment in the future. But it is weak when built on the shaky foundation of cheap debt.

We’ve been told to look away from the mystery of the Fed. The assumption is that the best interests of the country are safeguarded by this enigmatic group of brilliant academics. But our very destiny hinges on resolving to understand how Fed policy allows our politicians to abdicate their commitment to make the hard decisions that keep the country on a sustainable path to prosperity.
Public pension systems at risk, unaffordable housing, malinvestment, rampant financial engineering by America’s companies, stagnant wages, skyrocketing student debt, millions who have dropped out of the labor force, chronic asset price bubbles. All of these ills lay at the feet of the Fed, which has essentially become the fourth, and most powerful, branch of the U.S. government.


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