“The fundamental economy looks very good,” Larry Kudlow maintains. Apparently it’s doing so well that we need an immediate 50-bps rate cut.

If there’s one thing the markets love, it’s more easy money.  If there’s anyone who loves easy money more than the markets, it’s politicians.  Candidate Donald Trump told us so in Sep 2016.

Republican presidential nominee Donald Trump, who has previously accused the Federal Reserve of keeping interest rates low to help President Barack Obama, said on Monday that the U.S. central bank has created a “false economy” and that interest rates should change.

“They’re keeping the rates down so that everything else doesn’t go down,” Trump said in response to a reporter’s request to address a potential rate hike by the Federal Reserve in September. “We have a very false economy,” he said.

“At some point the rates are going to have to change,” Trump, who was campaigning in Ohio on Monday, added. “The only thing that is strong is the artificial stock market,” he said.

Friday saw stocks break out of a well-greased falling channel.  Today, futures are up another 20 points and threatening to take out March’s highs.

continued for members…

A quick look around, and I’ll be back with commentary.

USDJPY is leading the way with a quick spike which notably did not break out of the latest falling channel.

RB is still on the decline after reaching major resistance last week. CL is hinting at another try for its SMA200 at 61.65.  It might just make it this time. And, VIX is behaving as though it doesn’t intend to break down.As a result, ES has retraced .886 of its latest decline.  But, remember, its latest highs were just shy of the .886 retrace of its 2018 highs. Like ES, SPX is a short distance away from its Mar 21 highs and testing its .886. ZN is backtesting its .618……which has TNX backing off its channel bottom. And, interestingly, AAPL is loitering below its SMA200 after gapping above it.  While I think AAPL is ultimately going lower, a push above the SMA200 means switching to long.UPDATE:  1:40 PM

CL just tagged 61.65, the top of the rising wedge and SMA200.  We should see a reversal here, with initial support at the midline around 55-56, followed by 54.28 and 52ish. SPX and ES have pushed slightly above the Mar 21 highs… …and VIX is sitting at a slight loss.  USDJPY has backtested the top of the falling channel.If stocks are going to tumble, this would be a good spot for it to get going.  As member Jamie reminds us, the golden cross is now official.

This is either the start of the rest of the meltup or the start of the headfake.  Time will tell.  But, a meaningful tumble in CL would certainly be a headwind.  Would it be enough to justify shorting here?  I think so — with stops of course.  The fact that the purple .886s haven’t been tagged yet is a little unsettling.

Fine-tuning the targets for CL and RB…