Republic Risk: Back Above the 20s... But Inflation Reports Loom

Don't fight the tape; any move above the 20-day moving average is a clear momentum continuation. Risks are still building, but low-volume trading has been taking us higher since Monday.

Equity Storm Watch Is GREEN on the S&P 500 and GREEN on the Russell 2000B

Michael Howell started my morning by announcing that global liquidity increased by another +$900 billion this week, pushing us toward a $172 trillion threshold. Remember, capital tends to move into the equity markets when liquidity expands globally. These markets have held up well - with virtually no 2% moves in so long I’ve forgotten. The Russell kicked back up above its 20-day moving average… and the S&P 500 saw a move back above that threshold, too. Investors should always watch that “breakout” technical level - as you’d be shocked how much of the gains come thanks to algorithmic trading above that point. 

There are two risks at play in our readings.

First, tomorrow’s Consumer Price Index arrives tomorrow morning.

With little resistance, markets tend to perform fine, making Tuesday a day with little surprises. But tomorrow comes early, and volumes remain VERY low for the moment. Second, we’re watching the banks…