Sunday, June 27, 2021

How Helicopter Ben Killed Bond Vigilantes

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Mar 5, 2021
Previous SGS Status
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

Sometime  during one of the darker days of October of 2008, while the industrial world's economies and financial markets were teetering on the edge of an historic collapse, Ben Bernanke decided to put the Modern Monetary Theory to work in hope of preventing the world from sinking into a depression.  By doing so, he effectively killed all "Bond Vigilantes" and ushered in a new financial era.  An era in which central banks around the world buy as much government and corporate debts as necessary in order to keep the their economies growing and their workforce employed.

Since 2008, through its primary dealers, the Fed has bought around seven trillion dollars of government and corporate debts.  Barring any substantial and sustained inflation in labor and energy costs, there is absolutely nothing out there that would stop the Fed from doing what it has been doing for the last 13 years, buying more debt. 

For the foreseeable future, the Fed will continue creating money out of thin air to purchase more government and corporate debts.  That pushes the value of the money lower and hence asset prices must go higher.

SGS Market Timer

As of the close of last Friday (6/25), the value of SGS was calculated to be +496 and the status of SGS remains LONG.

S&P 500 Support And Resistance Levels

Support and resistance levels for SPX for next week are shown above.

My Plan

SGS is LONG and my plan is to stay with my long positions.


SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.