Credit Flow Investor

Gross Inflation Falls to 1.9

Core Inflation flat..

Now that we have Fed clarity …the USD market sees the end of rate rises and weakening economy. Bullish to SPY! But Buy SPY on 1st GHA at the close.

Black macd x red line…a bullish move for SPY as Fed weakens its stance due to inflation under control in the last 2 months.

Mild uplift to 272 for SPY by Dec 31. And 287-290 by end of Jan with a continuation into Feb and Mar.

Inflation can be seen from ROC250 as being tamed nicely.  Oil now moves sideways with upward bias since Powell’s ‘neutral’ speech. Oct and Nov oil were down. +60% was too much in early July and October. Notice when oil comes off SPY can resume an uptrend (Jul-Sep).

Liquidity and oil uptrend return to the system in January.

Also treasury curve close to inversion so Fed has to stop or at most 1 more rise:

Core inflation is falling for past 3 mo achieving Fed’s objectives…

2015 had rapidly rising inflation as did the beginning of 2018…

And economy strong UC claims great:

Jobs plus lower inflation…

For November inflation, also down but due for a rebound from 0:

Note core inflation has fallen for 3 months as has gas inflation so core inflation should also fall for November. This allows a rebound for the next 3-4 months.

Already a double dip so no dip at Fed Mtg…

LONGER AND DEEPER THAN EXPECTED:

17 RHA bars and no counter rally for 1 week…

VIX HA shows the turn the day before…

AND VIX dots/ohlc shows the turn at the open Oct 30…

Oil has broken the 40 wkma….but needs to do more by Nov 9. Oil macd has turned down and previous mini-bears in oil have lasted 5 weeks….2 weeks left. What should the target be 55???

Gas price inflation up again!

May 4 is day after Fed Mtg…

The july SPY run took place so quickly as VIX did not exceed 20.

Also the long term VIX averages show that this will take 3 weeks to process for blue line to peak …

2 rises next year is a big event…