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Monday, February 13, 2017

Daily update 2/13 Treasury Receipts Turn Negative For The First Time Since The Financial Crisis

Bulls really chasing price now.

SPX popped up above the upper channel line.  Breaking out of a channel then coming back in often causes a break out of the other channel line.  We will have to see if this one comes back in or not.  Breadth was only +54% which is pretty weak for the size of the move.  New highs expanded to 259 which is pretty good, but still below the 322 we saw on 1/25.

The futures keep on heading higher.  There is actually room for a pullback to the red line which might be support now.

Despite the sizable move up the green count actually slipped a bit.  This goes along with the breadth to signal that maybe the day was not as strong as it appeared.

This is a lot like spring 2009 in reverse for me.  At the time I could not understand why the market kept going down with the FED doing QE and the government having passed a stimulus plan.  The market finally figured out that stuff was positive and went up, but for a month or so I was really confused.   As I look at the economic data it looks like we still need to be worried about a possible recession this year.  I see clouds in a number of pieces of data and no all clear sign anywhere.  I think this is largely retail investor money piling in now which is inherently somewhat scary.  It looks like there was a bit of profit taking in the market today.  Whether it will be enough to stop the advance remains to be seen.

I can't see any sign the economy is doing anywhere near as well as the pundits and the stock market would have us believe.  Credit standards have been tightening for 1.5 years.  Now we have this.
Treasury Receipts Turn Negative For The First Time Since The Financial Crisis

Interesting chart isn't it.  So tax receipts have never gone negative like this without being associated with a recession.  Based on the history of this data we should already be in recession.  As I have mentioned before the hard economic data does not match up with the soft survey based economic data.  What gives?


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