Hi, an opposing view to yours from TJWatkins of simpler.  he sees similrities to 60s and 70s inflation data and graphs.  Check that out too.

      https://mail.aol.com/webmail-std/en-us/DisplayMessage?ws_popup=true&ws_suite=true#:~:text=%E2%80%9970s%20Inflation%20Flashback,period%20of%20inflation...

    you'll need to try and

    Posted by matt on 18th of Aug 2022 at 03:32 pm

    you'll need to try and post the info some other way either by downloading the images etc, that URL is a link to your email system

    you can always send to me as well: bptrades@gmail.com and I'll see if I can pull out the images or info and post here

    Sorry about tht.  You can

    Posted by imelhoe on 18th of Aug 2022 at 04:08 pm

    Sorry about tht.  You can look him up in utube presentation from 8/17/22, TG Watkins, Director of options trading at Simpler Trading, : it was very interesting how staglation and inflation affected those market s back in 1962  for about a decade and more .  he also  saw a formation of a megaphone then too and referred to what Michael Burry referred to as the bullwhip effect.

    Hey Market Pilot,

    Let’s go back in history to look at the ’70s and when inflation was a big deal.

    Since we are in a similar period of inflation and QT (quantitative tightening), I thought it would be good to look back at that era and see what the charts looked like so we can better understand what we might be experiencing in the coming years.

    Will there be a bullwhip effect as the Federal Reserve (Fed) chases inflation? Let’s take a look…Traders can learn a great deal by reviewing historical economic events – decades ago or more recently – especially when combined with the Moxie Indicator™ Mastery Program. The goal is to work through and trade whether the market is up or down. Check out the market movement today!

    Yes but back in the

    Posted by steve on 18th of Aug 2022 at 04:39 pm

    Yes but back in the 1970s debt was much less - heck only the wealthy had credit cards.   The whole Western based economic system is now based upon credit and debt - and every marginal increase in rates will inflect pain.   My parents were prime example - no cash no purchase.   Then if you look at the FED - QT?  That wasn't even in the vocabulary back at that time.  The chart I posted below shows a real household income plunging due to inflation - you can ramp credit for awhile to sustain but unless rectified it will not end well.  Many  families having a difficult time making ends meet (not splurging) just paying for basics.  It's even worse in Europe - with the energy and currency.   

    I think we're in agreement. It

    Posted by DigiNomad on 18th of Aug 2022 at 04:45 pm

    I think we're in agreement.

    It will be interesting to see how things play out in the coming years with power in Congress shifting yet again. The Fed admitting while they were doing the last rounds of QE,to include purchasing assets like HYG, that they were crossing what they considered to be a bright red line. I expect the unilateral expansion of their granted authorities to have consequences at some point - probably starting with some hearings next year. I would like to see the Fed remain independent, but  they crossed a line(s) that make it a tougher sell going forward.

    Yellen jumping straight from the Fed into a highly partisan cabinet position is not going to help their arguments for remaining independent. 

    Honestly, I prefer to look

    Posted by arun on 18th of Aug 2022 at 04:50 pm

    Honestly, I prefer to look at technicals than question why and what?

    QT - did it ever

    Posted by DigiNomad on 18th of Aug 2022 at 04:33 pm

    QT - did it ever happen before the 2000's and the advent of QE?  I'm not referring to normal "open market operations" conducted by the fed in order to maintain their piece of the curve at the prescribed levels - that's a given.  I mean the fact that the Fed took the extraordinary step of buying other assets in the open market and now has to sell them or hold them on their balance sheet...which I don't think they really have authority to do, even though they did it anyway. I'm referring mostly to MBS's, HYG, TLT, etc.  I wasn't aware that there was a valid comparison back in the 60's and 70's....

    Broken link?

    Posted by DigiNomad on 18th of Aug 2022 at 03:25 pm

    Broken link?

Newsletter

Subscribe to our email list for regular free market updates
as well as a chance to get coupons!