Can anybody explain why the USD is up in response to the Fitch downgrade?

FRED site finally updated and liquidity has turned down. Correlated to the Market again too.

https://fred.stlouisfed.org/graph/?g=1659M

I've been watching liquidity too, but the FRED site has no update for liquidity since June 14.

https://fred.stlouisfed.org/graph/?g=1659M

Liquidity Report - Anybody know when the liquidity (blue line) portion of this graph gets updated? Last data point is from 8 days ago (whereas the red graph for SP500 gets updated daily).

https://fred.stlouisfed.org/graph/?g=1659M

My FRED link only shows the Fed Balance Sheet (BS), so it is missing the other components (Bank Reserves, TGA, FRB Loans), and that is what I need help tracking as the Fed BS has been declining over the past 2 months while liquidity has risen.

Wow Steve, what an awesome and useful discussion on liquidity! Is there any means for us to track this ('Liquidity is composed of Bank Reserves, Fed Balance Sheet, TGA, FRB Loans")  on a daily basis? I thought I was tracking the Fed Balance Sheet at https://fred.stlouisfed.org/series/WALCL but it does not seem to reflect the increases since the end of March. Thanks!

For quite a while, I’ve been wondering the same question as bulf6285 asked. XLE was a 1-year wonder and not the driver of the Bull market since 2009, so I do not consider its decline as evidence that the previous leader of a Bull does not lead the next Bull. I feel the leader of the Bull since 2009 was FAANG or MAANG or whatever you want to call the tech mega-caps. I am not a trader like most here – other than a small trading account, most of my focus is on long-term positioning of my larger 401K. In my personal notes over the last year, I wrote to avoid “FAANG” tech stocks due to the inevitable shift to the next Bull market’s leader, so I missed this entire tech run in my 401K. Well, FAANG is clearly leading now. So, do you consider the recent uptrend to be some sort of dead cat bounce of the dying Bull from 2009 (i.e. new lows are still to come), or do you feel a new Bull is starting with FAANG as a leader again?

That just show the change in M2. The huge spike during COVID-19 still leaves the total M2 well above the pre-COVID trend.

https://fred.stlouisfed.org/series/WM2NS

Thanks Matt! Next time, I'll just do exactly what you do (Matt+System > System).

DVDS Short:  Hey Matt, what would it take to see a 3 ^rdentry in the DVDS short? BTW, I inferred your selling ½ was a discretionary call and not an actual systems trigger, so I am still 100% short on that trade since I am trying to be more disciplined and follow the signals mechanically. 

Thanks!

What is the ticker symbol for which you can buy VIX Call options? I have never traded the VIX and it seems there are no options for symbol "VIX". Thanks,

“Why would market participants not take the risk free 5% in treasuries vs the very risky 5% in equities?”

Maybe because treasuries are not truly risk free. When interest rates rise, the principal or present value of longer dated treasuries can lose more than 5%. You may counter that this risk is small for short duration treasuries, but so is the total  return since they are not held for much time. One may counter that a longer dated treasury can return a coupon for years and be risk free if you are ready to hold to maturity, but equities still return more over the long run if your holding period is that long. As for treasuries producing cap gains as rates fall, there is no guarantee that rates will fall soon or that the “flight to safety” characteristic will return – given the 40 year bond bull market seemingly has ended, we may be facing a decades-long bond bear. Nothing is really risk free IMO.

I noticed the same for JEPI. FWIW,  I bought some on Monday for the dividend and sold it yesterday morning (I still get the dividend) in case the market crapped on the Powell comments. Others may think they had to hold until today to get the dividend, so this may be more ex-dividend selling, Plus the DOW is down and JEPI is more like the Dow than the QQQQ.

I use SPY (or SH) for systems 1st entries, SDS for 2nd.  I  do not have access to ES futures. I avoid options due to time decay (and if I don't have the capital to buy shares, then I do not take the trade vs. using options for leverage).

Given that, is the SPY Stoch Rev SHORT  on the verge of closing out? 

Thank you for the thorough response. We're all good. You do a great job and I do appreciate it.  Lesson learned.  :-)

I had a similar bad experience. I went long QQQ at the open on 8-24 per the systems guidance. I work full-time, so I place these “at-the-open” trades the night before. Last night while reviewing my positions, I saw the Strap long had closed and I was tempted to close the QQQ long, but you said there was no signal yet for that. So, with no email or blog guidance on selling QQQ last night, I did NOT place a closing “at-the-open” trade for QQQ when I went to bed. I went to work fat-dumb-and-happy still holding the long QQQ position. I checked my emails in the late afternoon for new signals and was dismayed to see there WAS a QQQ sell signal after the open which I missed. My QQQ position is way more than $10K, so this was a big loss. 

If I can respectfully offer a suggestion in the form of a question: Are you stretched too thin in monitoring 20+ systems and now extending them to QQQ and ETFs? IMO, the downside risk of you missing (and not broadcasting) a timely signal outweighs the benefits of adding more trading vehicles to generate more signals.

The teaser before the paywall says it all:  "We have +$7.4B worth of CTA demand every day this week, We have +$5.5B worth of US corporate demand every day this week, that is nearly +$13B worth of demand, that accelerates to the upside, in a flat market tape."

Correction: Has the Market factored in an annualized CPI reading near 9% on Wed? This is a certainty based on the calculation, as we take the previous 12 months (9.1%), drop the oldest month (June 2021 which was 0.5%) and add the most recent month (July 2022) which is likely to be at least 0.2%