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Thursday Thrust – Painting Those Windows for the EOQ

Posted on the 26 June 2014 by Phil's Stock World @philstockworld

SPY 5 MINUTEWhat a fantastic market!  

We went UP yesterday despite a 3% drop in GDP.  Imagine what would happen if we had a positive GDP – watch out Dow 20,000!  Of course the volume was stupidly low (20% less than Tuesday's much bigger sell-off) and the rally was led by the broadcast media broadcasters, large-cap companies that jumped 5%ish on the Supreme Court decision against Aereo.  

But who cares?  A rally is a rally.  Our multi-national Corporate Masters don't care that the US economy is tanking – that just means more free money from the Fed and a cheaper labor force for them and we are investing in the stock of those companies, not the US economy!  

Are we perhaps getting a bit overbought?  Well, sure, if you want to compare us to markets in which the World's Central Banking Cartel wasn't pumping in an average of $5 TRILLION per year into the markets (via their Banskter buddies, of course).  $29Tn is right about 25% of the total value of global equities and it's no coincidence that the S&P (and other major indexes) are now 25% higher than they were at the last market top:

Investor Psychology Cycle 040814

Yes, it's true:  If you put 25% more water (liquidity) into a bathtub you will get 25% more water in the tub – AMAZING!!!  At some point, you tub will runneth over but getting back to about where we were before the crash (liquidity drained out of the tub) probably isn't going to do it.  As I pointed out way back in June of 2010 with "The Worst Case Scenario: Getting Real With Global GDP!", we didn't break the tub – which is why, at the time, we bullishly expected it to be refilled at some point.  

 

 

IN PROGRESS

 

 

 


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