Chart Storm

This will be a very unique edition of the Thursday Newsletter, but it is something I may repeat in the future in moments of critical importance.

In these articles, I tend to focus for the most part on macroeconomic data, but we have drilled down on that so much on these over the past few weeks that I want to do something a little different.

All the data continues to point to a slowing economy and there is no proof of a pivot neither in the words nor actions of the Federal Reserve. Until and unless something systemic breaks in the credit markets, I expect Powell to pursue the “tighter for longer” policy.

Everything I have discussed about the economic outlook is fully expressed by the Yield Curve, which at -0.68 is the most inverted it has been since the early 80s when Volker was Fed Chairman.

To keep it simple it means that while policy in the short term is tight and rising, in the long end the bond market is pricing in a depressing outlook for growth and inflation.10s/2s Yield Curve

CHART STORM

There are particular moments in time when markets line up.Ironically this tends to happen in moments of either irrational exuberance or excessive pessimism.This is one of those moments.

Starting tomorrow, there are 25 trading days left to Christmas.So here are 25 charts for the next 25 days.

Before I go on I should restate that none of this constitutes trading advice, this is my analysis and opinion, and as is often the case when judging markets, the result may turn out very differently from what I expect.

Please read my disclaimer below carefully.

So without further ado, let me show you why I think the rally which everyone expects to last until late December, ended Tuesday, in a very spectacular moment where everything hit resistance at the same time.

Let's start with the S&P500.In my Sunday note, I mentioned that the SPX was likely to hit a brick wall at 4050, and explained why. So far not a single tick traded above this level.

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