Credit Flow Investor

Will be less neg for July as gas is falling slower…

AND CPI YoY still runs too hot…

weak July …AND VIX still reasonable at 18…

4 month cycle is turning….

3 weeks in…big change from May (quite high). 5 months up…

Also …when oil surges, oil money surges into SPY. Hence, big up in SPY occurred April and May.

Upside now is limited to +2-3% to mid-July.

Based on average prices….

9.2% means 1.47SD

OR

0.25 + 1.47 X 0.15 = 0.47 CPI

BUT liquidity dries up with SPY volatility so prices in June negative.

AND Gas prices down for 2 weeks!

Average Price for May $4.47 and Jun so far $4.15 so -7% …

Volatility in SPY will lead to continued downward pressure on oil and CPI.

Previous May did have rising oil BUT SPY was on fire with added liquidity…

Let’s say oil falls to $87 (average for Jun) then -15% from May translates to -2SD or

0.25 – 2 X 0.15 = -0.05 CPI for Jun.

Despite record breaking stock rally 2023-2026…

The earliest bottom will be 2031 or 8.3y down cycle…

Clearly a bear market now…

So CPI will be 0.2 for May….falling inflation now.

BUT earliest drop will be Oct.