Wednesday, August 10, 2022

SPX and NYA: Salvation Reduction Act

So the Senate has passed the comically-named "Inflation Reduction Act," which pumps another $430 billion in cash (that the government doesn't have) into circulation -- which leads one to wonder why there are no "truth in advertising" laws that the government must abide by.  If a company tried to sell gasoline as "Fire Reduction Liquid," they would be sued into oblivion.  And rightly so.  Yet our own government can name things the exact opposite of what they are -- and of course there are no laws against this, because that very same government makes the laws.  The same company selling gas as "Fire Reduction Liquid" writes the laws that say, hey, it's okay to do that if they want.  Which they do.  And no, you cannot sue them either, you low-life voter.  Now stop questioning authority, return to your pod, and eat your low-CO2 bugs like a Good Citizen.

To be fair, this new spending bill will also help cool the economy by killing jobs and lowering wages via higher corporate taxes, so it may end up being a wash on the inflation front, and the Congressional Budget Office suggests the bill will, at best, impact inflation by one-tenth of one percent -- but they're not sure whether that change will be up or down. What a time to be alive.

Anyway, I digress, and that's enough government-craziness for one day.  Let's look at some charts.

Since last update, SPX encountered resistance at the prior high (as mentioned last update), but so far has only declined to test the bottom of the purple channel:

NYA is still below its "textbook" target:

In conclusion, there really isn't too much to add to the last few updates, as SPX has been range-bound.  It is again worth mentioning that, so far, bulls have managed to hold the breakout and until there's a whipsaw, bears might want to remain near-term cautious.  Trade safe.

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