Macroliquidity is still trending higher but the trend is flattening as the Fed withdraws money from the banking system and extinguishes it. That means that there is less and less money available to absorb new securities issuance, particularly US Treasuries.
Every April and May, the markets get a break as tax receipts come in and the government pays down debt. This year has seen a particularly big influx of cash into the markets, which I cover in detail in the Wall Street Examiner Treasury market updates. This positive period is now coming to an end. So don’t be lulled into a false sense that the bull is back. This is temporary. The trend of money shrinkage will continue, and that will negatively impact stock prices in the months ahead.
Here’s how the data breaks down… thanks to my “secret weapon,” the Composite Liquidity Indicator.
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The post Weekly Bear: The One Bloodletting Chart You Need to See This Weekend was originally published at The Wall Street Examiner. Follow the money!