Technical Buyers at key MAs Step In, Equities Are Not a Measure of Economic Fundamentals

Subscriber Data Nov24 2025

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So the excuse of the day pushed is the same theme we always here is that rate cuts are good for risk assets, money is cheaper, leverage is cheaper. However what rate cuts really mean is that the real economy is suffering, which it is. This generally doesn’t bode well for equities, but then again, the equity prices aren’t a real reflection of the general economy, they are the savings and risk accounts of the wealthy and those that are forced to stay invested via tax deferred accounts. There is so much capital concentrated that in general prices will reflect the amount of the money supply multiplied by some leverage ratio. So in general its very difficult for prices of risk assets to fall because the money supply never contracts for very long, it can stagnate, but it never contracts. Second, with the US Govt debt pile so high, the amount of new money created everyday just to pay interest, leads to a positive feedback loop for recycling new dollars back into risk assets.

We continue to see calls for the FOMC to refrain from cutting rates, because inflation is still high. We do not agree with this logic that in today’s monetary system, higher rates alleviates inflation, rather we are in the firm belief camp that higher rates CONTRIBUTES TO INFLATION.

It contributes via the mechanism of new risk free interest money that is created each and every day. The law of large numbers is wreaking havoc on the economy because it requires a constant influx of new money by default and this influx grows larger and larger each and every minute. This money creation is at the core of never ending inflation and its why the FOMC will eventually return back to ZIRP.

Ok so let’s look at some of the technical bounces that we warned of in our post last night given the 21p and 50pMAs were hit in most markets. Here is the QQQ ETF:

When we look at the hourly chart, we suspect the 608/612 level to offer initial resistance here and that the 602 level should be a magnet for the battle here. Although the risk markets need zero excuse to just run, we would suspect a little back and forth to ensue.

The Nasdaq futures out of the gate run up 600 points plus to start the week but 25k should prove to be an initial upside resistance point to overcome now and a bit of back and forth is most likely:

The SP500 is also back above the b/bear pivot:

We aren’t sure why but when we look at this spread between the SP and NQ our green trend reversal line seem very formidable and does give the edge back to the NQ for now, but we believe this weeks closing print is important so we will watch this -156k level for any market directional clues:

Now let’s move to the bond markets, specifically the US Govt 2Y which did auction off a new issue today and is once again below the 3.50% area:

As far as the US yield curves we will continue to await the 5yr to finally break its 2023 yield low area of 3.41%, but the curve steepening is apparent:

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