You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here. Watch This Line Like Your Life Depends on ItMomentum can break in any sector VERY fast... Get ahead of this right now...
Dear Fellow Traveler: Yesterday, I met with my readers to talk about the state of the markets (Money Morning Elite quarterly call). We went two hours… including about a one-hour presentation. Late in the conversation, I was talking about how the current market bears a few similarities to what happened in 2022. Recall, the liquidity-credit cycle peaked in late 2021. At the time, we had early warnings that Russia might invade Ukraine. But - and this is important - momentum started to break down on the back side of the peak. Our signal turned negative to start the year, right on January 3 (I was on Money Morning LIVE! when it happened). Here’s the thing… we had multiple momentum breakdowns that year. We saw it happen on January 3, February 12, and April 6. But the big one? The one that matters? That was June 8, 2022. That was - over the next nine days - the largest hedge fund selloff in 15 years. What broke the market? Energy did.
Despite oil, gas, and agricultural stocks rallying over the first five months to nosebleed levels, a sudden decision by funds to dump long energy positions fueled a surprising downturn. That coincided, interestingly enough, with a sharp tightening in the Economic Conditions Index. I look at the current situation with the exact same eyes. We’re on the backside of a liquidity peak, according to CrossBorder Capital. Voices from all around the upstream liquidity world are warning about dollars and collateral quality. All while energy prices move higher. So… what do I need you to watch… I want you to pay very close attention to the MicroSectors Oil & Gas Exploration & Production 3X Leveraged ETNs (OILU). Back on June 8, 2022 - when energy cracked… it cracked fast under its 8-day moving average, and then its 20-day moving average. From there, it was a cascading freefall. This thing went from nearly $90 to about $30 in just weeks…
It was a classic RISK OFF event in markets. Every sector turned negative that week. The market bottomed out a week later. Well… here we go again… History is rhyming.
Which is a reminder to watch that red line… that 20-day EMA… and make sure that you’re not the only guy without a chair when the music stops… But… It’s not just energy… Back on June 8, 2022… funds dumped food commodities too… Archer Daniels Midland (ADM), also on our breakout momentum list, cracked hard. Right on time…
That moment will come this year. But you’ve got a friend in momentum and in the risk-off signal; that's as simple as the 20-day EMA for these stocks. Now… let’s look at the week in review… Monday, March 22So, What Are They Saying About Liquidity?Five plumbing experts… five situations… one conclusion. This market is facing challenges from a shortage of dollars to questions about private credit.
Buckle up. Tuesday, March 23Is The Stock Market Just One Long Sandra Bullock Movie?Have you ever wondered why the Federal Reserve can’t take its foot off the gas?
Well, maybe you should think about these challenges through the lens of the film Speed. Wednesday, March 24Five “WTF Moments” from the BIS Quarterly ReviewWant to know what an SRT is? No you don’t…  This report was enough… Thursday, March 25People will come, Ray.
People will come. Friday, March 27Money Printer Went BRRR... And Other Things You MissedHey… they printed more than $1 trillion… did you miss it?
The Fed doesn’t make money… well… they print it… but they don’t “make” it. Saturday, March 28For Those About to Chart... We Salute You...Cash is a position… and other charts… Come to the Chart Party…
Chart No. 3 is crazy… That’s it… Please share this with friends and enemies… Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
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