I saw this posted by a portfolio manager for a big state pension plan yesterday. It struck me just how significantly the market has changed over the past 20 years. Twenty years ago, stock buybacks were mostly illegal. They were considered manipulative.
Today, they are commonplace — fueled largely by historically low interest rates, favorable tax policy and an incentive structure that rewards corporate chieftains more for short-term rallies in their stock (buybacks) than for investments which will pay off handsomely in the long run (capex.)
If this scenario troubles you, though, what should you do? Suppose you’re a portfolio manager with responsibility for providing retirement security for a million participants. Where else should you put the millions of dollars arriving every month from participants’ paycheck deductions? Treasuries paying 1.8%?
Many portfolio managers have told me they’re secretly scared to death of the market’s nosebleed levels. In the next breath, however, they all say basically the same thing: there is no alternative. Those who aren’t stumped by TINA live in Fear of Missing Out.
As a result, the equity market has turned into a grand game of musical chairs. Buy stocks to keep up with the averages, but hope to God you can grab a chair before everyone else when the music stops.
Meanwhile, central banks are doing their best to ensure the music doesn’t stop. Ever. Why else would the discount rate be back down to the level it reached in Jan 1931, the middle of the Great Depression, when the Dow had plunged 55% on its way to an 89% crash? 
For the umpteenth time in the last few months, futures have recovered their most recent losses and are threatening new highs. Nothing especially positive has been reported in the financial press. But Trump is speaking to the NY Economic Club at noon, no doubt to report on the incredible progress being made in the China trade negotiations which were successfully concluded last month (but which are, oddly, still being negotiated.)
And, of course, the algos are still being stoked by VIX threatening new lows and CL and USDJPY threatening new highs. What else is new?
continuing…
On to today’s charts. The yield curve model is clearly indicating bearish conditions ahead.
But, the 2Y has broken out. As long as it can remain broken out, it is net positive for stocks. The rub, of course, is that as short-term rates rise, the macro picture quickly deteriorates. Like CL’s recovery, I view this as a temporary phenomenon.
The 10Y remains in break-out status.
Yet, ZN is approaching three levels of good support – the white channel, the .618, and the rising SMA200. 
VIX is being hammered again. 
CL continues to bump up against its SMA200 – but never break out. Waiting on Aramco.
And, USDJPY is back on top of its SMA200.
Bonus charts of the day: if the consumer is doing so well, why can’t AMZN break out?
UPDATE: 12:00 PM
Trump is about to speak and stocks are backing off their initial ramps.
UPDATE: 3:06 PM
ES has gone flat on the day, back to support at the red TL from last Wednesday. Do or die time after more China drama: https://www.zerohedge.com/markets/stocks-stall-after-chinese-media-comments-trump-speech-lies
I have to run out for an appointment, will leave it here.
GLTA.