01/18/2017 Live Update

[Cobra]

Cobra,

I dont get end of the date " next day" or Market outlook sonce last 2 days.

Can you please check?

Thanks

You mean email notification? Check your spam folder. Besides, you don't need email notification, everything is posted at www.cobrasmarketview.com. The email is just to let you know that there's a new post but actually I post those report at fixed time everyday. Let me know if you find those emails in your spam folder or not. Thanks.

[TraderJoe]

From an article, not from me;

It's a good time to worry about additional upside, even though there is a good chance of additional upside at least for the short term. We know the market depends on liquidity to continue to move prices higher. Without liquidity to add to the purchasing power we'd see natural selling begin to overwhelm the buyers (selling is often a requirement, to free up cash for expenses and purchases whereas buying is almost always an option). A big liquidity provider over the years has been the Fed. Whether it's through money printing or abnormally low interest rates (cheaper loans) the Fed has been a huge primer for the financial markets. That's been quietly changing and could soon have a negative impact.

With all the talk in the past year about the Fed's desire to raise interest rates and take a less accommodative stance, it's interesting to note how much they've been draining liquidity since late 2014.

fred.stlouisfed.org

The balances ranged between about $5B and $20B from 2000 through 2008

Following the scary banking crisis in 2008 the Fed came charging in for the rescue and between September 2008 and January 2009 the balances spiked to a little more than $800B and then $1200B ($1.2T) by the end of February 2010.

It reached a high near $2.8T by the fall of 2014.

Coinciding with money growth were of course abnormally low interest rates. The combination of new money coming into the financial markets and nearly free borrowing by corporations to enable them to buy back their shares, we saw a very steady rise in the stock market into the end of 2014, coinciding with the end of the Fed's money growth. After a bit of a wobble/consolidation in the stock market through 2015 the corporate buybacks continued as companies were able to continue borrowing the funds at nearly no cost. Borrowed funds and earnings were used to buy back stock because they saw little reason to invest in their own business. That alone is a worrisome sign.

While corporate profits were in decline it was hidden by the fact that earnings per share were improving, or at least holding up, because the numbers of shares outstanding were declining. The problem for the market since the end of 2014 has been a battle between the continuation of corporate buybacks and the removal of some of the excess liquidity from the financial markets. But at least the buybacks were helped by the Fed keeping rates so low. That's now changing.

A run up to the trend line along the highs from April-August 2016, will be near 2315 by the end of the month.

The real question is whether upside potential is worth the downside risk.

[Cobra]

Cobra,

I dont get end of the date " next day" or Market outlook sonce last 2 days.

Can you please check?

Thanks

Thanks, I found the problem was on my side and should have fixed it. You should start to get the email today. Thanks again and sorry for the inconveniences.