Credit Flow Investor

And my equivalent indicator: Quarterly Unemployment Claims…

And monthly:

OEX 12dma not sideways yet so still more SPY upside…but limited to 305.

Weekly macd moves up more slowly…

Some new inflation forces have turned the 2 year treasury up.  This happens before a major market fall. Core inflation has also turned up in June…

And core inflation monthly up quite a bit more than June last year-

The Conference Board LEI for the U.S. decreased for the first time this year.

Large negative contributions from building permits, the ISM® New Orders Index, and initial claims for unemployment insurance (inverted) fueled June’s decline.

In the first half of 2019, the leading economic index increased 0.2 percent (about a 0.4 percent annual rate), significantly slower than the growth of 1.5 percent (about a 2.9 percent annual rate) over the second half of 2018. In addition, the strengths and weaknesses among the leading indicators are now more balanced.

The Conference Board CEI for the U.S., a measure of current economic activity, increased in June. The coincident economic index rose 0.3 percent (about a 0.6 percent annual rate) between December 2018 and June 2019, much slower than the growth of 1.3 percent (about a 2.7 percent annual rate) over the previous six months. Also, the strengths among the coincident indicators have become less widespread, with three out of four components advancing over the past six months. The lagging economic index increased, but at a faster rate than the CEI. As a result, the coincident-to-lagging ratio declined in June. Real GDP expanded at a 3.1 percent (annual rate) in the first quarter, after increasing 2.2 percent (annual rate) in the last quarter of 2018. [Full notes in PDF]

https://www.advisorperspectives.com/dshort/updates/2019/07/18/conference-board-leading-economic-index-fell-in-june

Same old…same old…increase of debt over gdp spending…

June was biggest surge in 5 years…

MZM is now 16T and

SP500 Mkt Cap 24T.

The 2y treasury is a bit more sensitive and starts down sooner. But both confirm now…

Note record margin debts. Real SP500 levels bottom between 1000-1200…

Inversion That Matters

Inversion that matters…crossed 0 in April. This time 10-2y won’t happen as 2y treasury is falling faster than bonds.  Hence, there’s a much bigger run to cash than before which implies liquidity crunches. Once it reaches -1.0 …liquidity crunches for sure.

When fed drops rates….recession is around the corner:

1. 2000 rate drop Jan…recession start 2 months later.
2. 2007 rate drop Aug…recession start 5 months later.