No Limits
Oil is tanking again, but that’s nothing new. The market seems to be taking it in stride, and even though crude is now sub $13 on the front contract, the Dow is managing to hold a gain of nearly 1.5%. Sure, we can claim optimism over the announcement that New York will begin opening anew in mid-May, but those of you who read the our newsletter regularly know the real reason that the market is only 16% off its all time high right now.
When those who are in charge of creating the money are buying, it’s kind of hard for prices to fall.
Case in point, here’s the top headline from Asia this morning…
To be clear, the only thing that’s changed here is the rhetoric. The Bank of Japan has always been happy to buy as many government bonds as the government is willing to sell. The only reason for the “limitations” was to manage the market’s expectations, but these limits could always be raised as needed.
This week is a very special one for Wall Street as well, when the remaining FAANG stocks report their Q1 earnings. We heard from Netflix already. Google will go tomorrow, Facebook on Wednesday, and Thursday Amazon and Apple.
All are expected to forego the tradition of giving their forward guidance on how they’re performing in Q2.
Fresh High
It’s entirely possible that we’re now in a temporary bull trap, and we may test $7,000 to the downside again. In fact, this would be well within the current upward facing channel.
Of course, with everything going on right now, it could also just bust through the top and zoom toward the next point of resistance, possibly near $10,000. There’s really no way to know. Past performance isn’t really an indication of future results, nor does it really matter much to me.
More than the chart, I just keep watching the countdown timer, which now reads just two weeks to the halving.
