Wednesday, July 8, 2009
Liquidity Relationship Clearly Pictured
Here is the clearest pictured relationship I have posted so far, between the Liquidity as manifested by the preference for Corporate over Govt securities. As more and more "MONEY" is ENTERED into the Markets, the higher the SPX 500 goes. As the rate of fund addition slows, the upward movement in the Indexes slackens and starts to trail off.
No funds additions ='s no upward movement in the Indexes.
Very telling is the MACD for the Standard Poors 500 index, a perfect dome as the market turns over. Add in Mr. Nasty's turn down and you have a picture perfect rollover of the markets OUT OF RALLY MODE.
I think that picture is worth a lot more than a thousand words.