SPY - The Markets Speak: The Great Flood Of Liquidity
My service signaled a move to cash for our subscribers on Feb. 21 at 9:55am, within 1.6% of the all time high for the S&P 500. It was satisfying to signal an exit an the all time top. But the subsequent flood of Fed liquidity can created whiplash inducing market moves that terrify most investors.
Here is a useful empirical framework that guides a rational algorithmic approach:
First, fundamental data is widely reported. However, market prices react to both fundamental data, and increasingly, to central bank liquidity injections.
Second, heavy-handed central bank moves to inject