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Urban Carmel Profile picture
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Feb 20 • 5 tweets • 2 min read
This sounds bad until you realize that the change in "global M2 liquidity" doesn't correlate with the performance of $SPX (1/2)
Green circles: "global M2 liquidity" falls and $SPX rises anyway (2/2) Image
$SPX fell 20% while the "BOJ balance sheet" expanded, and then when the balance sheet started to contract, $SPX rallied 16% (arrows). News you can use Image
The "BOJ balance sheet" doubled and the Nikkei gained just 3% pa. #morecowbell Image
First, the Euro CB balance sheet contracted 50% and stocks rallied 80% (blue arrows). Then the balance sheet more than doubled and stocks did...nothing (green arrows). Image

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More from @ukarlewitz

Urban Carmel Profile picture
Jan 10
TDA clients net sellers in December (green line). Sentiment about as low as it has gotten in the past 13 years
Which is consistent with fund managers polled by BAML in December. Extremely high cash and low allocation to equities
And consistent with AAII spread (one-month). 35 yrs shown below
Read 10 tweets
Urban Carmel Profile picture
Jan 5
“And maybe I’m in a good position of knowing the limitations, given that it’s my model.”
At least two reasons given.

First, "real" 10-3 (the actual basis for the model) has not inverted. This matters because further out inflation expectations are easing, lowering the recession risk. Here's real 10-1 as an example
Second, the job market remains robust. Job openings relative to the unemployed means laid off workers will quickly be re-employed. It has never been this strong prior to a recession
Read 15 tweets
Urban Carmel Profile picture
Jan 4
I think this (from late March 2021) is useful context for understanding the current market. $SPX today is where it was 21 months ago
Updated chart. Rapid advances have led to consolidation. This one kept going higher another 9 mo so a longer/deeper consolidation isn't a surprise. Image
I think this is useful context because it also reflects the macro environment. Here's retail sales (real, ex-gas), which got absurdly above trend and is now backfilling (LHS, % chg; RHS, $) ImageImage
Read 5 tweets
Urban Carmel Profile picture
Jan 4
Every rally in the past yr has stopped when $NYHL (10-dma) has gotten back to neutral (bottom panel). It'll be a useful confirmation of a new uptrend when it backs/stays above 0 Image
$NYHL (10-d) reached 42 Thursday.

Likewise, this:
Table of forward performance for prior tweet on breadth thrust
Read 8 tweets
Urban Carmel Profile picture
Jan 3
At its closing low, $SPX fell 25.5% in 2022. Almost all of that (93%) happened by mid-June. Since then, more sideways than down (i.e., a possible base). 4100 then 4300 key upside Image
In contrast, $NDX has broken its mid-June low 3 times and starts 2023 below. If you think it needs to lead, then the time is now Image
Defensives - utes, staples and healthcare - lived up to their name in 2022, basically breaking even. The overall market got smoked due to 3 sectors - tech, communications and discretionary (RE has low weighting) Image
Read 18 tweets
Urban Carmel Profile picture
Jul 15, 2022
Up volume 87% today, one of the best of the year (upper panel). The next day hasn't generally seen follow through (lower panel). It'll be a good sign if that changes Image
No follow through from Friday's strong breadth, which has been the dominant pattern this year
Read 23 tweets

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