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Bubble Watch - Maybe it only just started, Dow 50000 (RTT Plus)
Created on: 7/25/2021 2:55:09 PM

bubble-watch--maybe-it-only-just-started-dow-50000-rtt-plusThis chart book suggest there is room to move for the fuel behind asset prices. A lot of room to move!

CAUTION: All boom talk is subject to a bearish EVENT (say):

1) Bear Sterns sub prime collateral issue in 2007
2) A new COVID XX and it is deadly
3) US interest rates and US dollar sky rocket
4) the FED does a 1937 and hikes rates
5) A major war
6) etc

This is David Hunter view, stocks shoot higher and an EVENT knocks over a single domino and they all start to fall, one by one. David Hunter forecast has a good chance of being correct, however the timing can be very different.

Chart 1 - Global Credit Impulse has more time to run, 12 to 18 months say


Chart 2 -  A lower USD is required to bring back foreign buyers of US debt, this huge stimulus for emerging markets and the world who have USD base debt.


Chart 3 - Central Balance Sheet have exploded. Recently the ECB going nutter than the FED, and the reason for recent USD strength. Deflation fear motivates these banks.


The red line is FED balance sheet (green) as US domestic buying of US debt (grey). It is going sky high, they can not stop, but if they do or slow down, WATCH OUT.


Chart 4 - Buy Backs are back. The red line says there is a lot of room to move higher. Recent approval of US bank stress tests means large buybacks for banks are due, XLF and !BANK to go higher.


Chart 5 - NYSE Margin debt has exploded higher, the second chart says there is a lot of room to move and margin debt could go to extreme, as never seen before. 



Chart 6 - Financial Conditions Index. So long as the black line stays above zero all is well. The financial system is working.


Chart 7 - The US housing debt is starting to explode. The red line is corporate debt, the green line is household (mostly housing) and the NEW juice behind the US economy. 


US housing prices are going higher at a faster rate. Its the new debt. More fuel for GDP. A new housing bubble. 


A new US housing bubble (2006/07/08) rinse and repeat.


Chart 8 - Lending standards are EASY, money is flowing to fuel asset prices for corporate's and households. Happy times are here again.


RTT Comments

- Global credit impulse says it all, easy money to run hot for a while yet.
- US housing is the new fuel for US GDP. Why? US Nominal GDP rate must stay above the US 10 yr interest rate.
- NYSE Margin Debt could go to numbers never seen before.
- Buybacks and FED juice is going push stocks higher.
- Get the feeling US mid terms in 2022 matter a lot to the DEM's.
- Guess what all this does to Bitcoin.

CAUTION: Here is a reminder, the FED can fix most minor bust but they can not fix a crash in housing. Remember this as the NEW US housing bubble evolves.

BOOM BUST Cycle repeats


NOTE: Posts here are the lite version, more depth on each subject can be found via our RTT Plus membership.

Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, Cycles, Wyckoff and Ney logic is the best way to ride the change, after all these methods have been used successfully for 70+ years. This post is a delayed and small sample of what is avaliable to members. Sign up to enjoy the full service.

NOTE: does allow users to load objects and text on charts, however some annotations are by a free third party image tool named

Investing Quote...

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Richard D Wyckoff

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Mark Twain

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Ayn Rand

.."Wait for that wisest of all counselors, Time"..


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Richard Nixon

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