New All Time Highs, FOMC Looms and Don't Call it QE!

Considering its FOMC week and one of the major central bank players is passing his baton on this year, we would like to thank him for his dedicated service, none other than Super Mario himself, the ECB's Mario Draghi. If there is one picture that highlights how well of a job he did, its this one:

Our own FED head Jerome Powell is on tap this week as the FOMC decision on Wednesday will be the highlight moment for this week’s trade. The market is pricing in a 98% confidence level garden variety, non-transitory, certainly not QE 25bp cut in the Fed Funds rate to a band of 1.50% to 1.75%. Mind you, dear intelligent reader this cut comes on the heels of record low unemployment and record stock market highs. So, you can go ahead and toss out your economic fundamental monetary policy handbook. This is in its simplest terms artificial non zero sum player stimulus provided to you by the only legal counterfeiting group or shall we say coordinated group participating global central banking cartel. All of which are guilty of creating money out of thin air to buy private assets. What a business right, what a way to bypass any discount or risk-taking mechanism that exits. In fact, we can just come right out and say it, all that matters is QE, plain and simple, earnings…garbage…consumer confidence…garbage…CAPE…garbage. Debt and QE two of our greatest assets, we were taught these were liabilities, right? Hell no, these are assets to be bought with freshly printed digital zeroes and sold to the highest negative rate bidder. A game of hot potato for the elite and connected. Zerohedge had a great chart to show the veracity of the complete about face that has occurred by the FED, when at one point in time (early 2019) were expected to continue to raise rates, well as this chart shows, someone (Trump) clearly forced the issue:

For us Austrian’s out there this is utterly disgusting, gross negligence, but inside the hallowed halls of the Eccles building, nothing more than decade old status quo kick-the-can down the road policy. We are all fools now, at least here at Econemotions, we can clearly express our viewpoint of financial markets, here we aren’t fooled into thinking that fundamentals matter. Here we know all to well that money, size and positioning is so greatly concentrated that the real painted target is any and all assets that investment bank, private equity and venture caps just to name a few conjure up so the central banks can swiftly take them off their hands. Well, not directly of course, just by secondary funding, or to you novices…what us professionals like to call, by adding “liquidity.” How much liquidity is needed, well from the looks of it and strictly speaking within the FED only, around $60bln per month, although this is Goldman’s estimate, we suspect it will end up being much more:

So, what does this all mean? It means equity markets will ride the central bank wave to infinity because the large players know damn well that the central banks are in no fail mode and it’s not even an option. Funny thing is though, not even the well connected first to the spigot types like buying new all-time highs, they must at least punish complacent buyers first, so we won’t be surprised to see these new highs rejected. Remember there’s only a limited number of seats at the final table and those weakest are always caught bluffing, wearing their hand on their faces, limping in with odds stacked way against them. As far as the equities go, we can look at the SP500 futures which have hit a very important level. A level we have been waiting quite some time for and that is 3043/45 zone. Here is the chart:

A failure at this zone in our opinion would be disastrous and may lead to deep downside probes as large accounts would undoubtedly sense weakness and punish any late to the party longs here.

When we look at the US Treasury Note Future, we can see that the complex is down 3 full handles from its prior high and moving toward clear support at 128-25 area backed up by the 61.8% Fib. Retracement:

If the FED does indeed cut once again on Wednesday, we would suspect gold and silver to respond accordingly but who knows, as recent news reports have stated, these markets have been rigged for quite some time, just don’t call spoofing and calling up other traders to pre-arrange trades, illegal, cause it all depends on who’s playing right? Anyway, here is a look at Silver who from the looks of it, $17 seems like excellent trend line support:

Now we haven’t talked about Bitcoin that much lately, but in our weekly updates we have noted the lower bound $7100 area as possible longer-term support. Well Bitcoin did trade down toward that zone and has quickly responded to that area by rallying smartly. We feel so many misunderstand this technology and so many will be caught off guard by the ongoing advancements within the blockchain and bitcoin ecosystem. Anyway, just think of all the fiat printing, all the debt, all the negative rates, then think of what are the alternatives, then you might begin to see bitcoin for what it truly is. Here is a chart of the Bitcoin Futures:

Ok that pretty much does it for our update. For those of you who continue to believe that there is an impending deal in the Trump China trade dispute, we feel that a near term resolution is unrealistic and that there is more to this than just trade. Trump smells blood and we have not seen him back down from anything, not in business, not in politics, not in anything and we certainly don’t expect him to back down on this deal. As far as we know, he has the data to back up his position and its charts like this one that clearly show, China is not in the position to be dictating much of anything at this point, they have far larger concerns domestically:

Thank you all for reading and we hope that you got something out of this and that you will continue to research on your own, improve your own thought processes and contribute some of what you learn to all those around you. We live in a world full of data, full of information, but the true key is interpretation and collaboration. Cheers.

DISCLAIMER: For educational purposes only. This is not a solicitation to buy or sell commodity futures or options on neither commodity futures nor an endorsement for the purchase and sale of an ICO, Cryptocurrency or any digital asset and should not be construed as such. The risk of trading securities, futures and options can be substantial and is not for everyone. Such investments may not be appropriate for the recipient. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of, or from the author Mike Agne owner of Magnelibra Capital Advisors LLC (MCA) and the website blog, which can be found at www.econemotions.com. All rights are reserved. We will never claim that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, (MCA) makes no warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed.