US Stock Market, Precious Metals And The Macro Backdrop

US Stock Market

Let’s cut to the chase; the markets have finally fallen in line for those of us who manage markets, as opposed to dollar cost average into them through a money manager and then go about life, blissfully unaware. Much like during the 2015-2016 period, when the media were all but demanding investors go one way when the right way was the opposite (for example, we got bullish during the Brexit mini hysteria because sentiment, macro indicators and charts told us to) during the market top (that wasn’t).

But today the bliss is wearing off as the average person did not need to wait for his monthly statement to see that something went wrong with the up-melting market that was printing him money every month. Here is a look at the Google Trend for the search term “stock market crash”. Per Google’s computation method, the reading cannot go higher than 100.

It’s a good bet that much of the new money, the ‘all-in and ready to make coin’ retail money summoned by the now-fiscally unrestrained economy and wooed by Donald Trump’s relentless stock cheer leading on Twitter, was pounding away at keyboards searching for what went wrong as well. Our handy graphic (courtesy of Sentimentrader) once again makes the point of who exactly got sucked in and likely, flushed.

But then came the relief on Friday, just as we had suspected earlier in the day when everything was red as a far as the eye could see. The linked post included a chart of the S&P 500, down another 1.4%, filling a gap and kissing the SMA 200. From the post…

Okay, a little play-by-play sports fans. I covered another short (on SOXL) and still have the bullish feelings (short-term only at this point) welling up within me. Can SPX go for the lower gap all in one big gulp? Well let me ask you this; how vigorously, how constantly, how emphatically did the president of the United States pump this market’s tires? I really do think this melt-down is emblematic of that asininery and it is doing a fine job of neutering it. Sure, it can go for that gap.

But SPX is at the SMA 200, sentiment is changing in a big way and I think the point has been made to any and all who had lapped up the jingoistic bullshit coming out of the White House.