Waiting for the event of the year scheduled for today (the Fed's press conference), I postpone until tomorrow the usual updates on Glassnode's metrics, which do not present any major news.
In the meantime, I post a few charts to show how extreme we have reached in many indicators regarding the stock markets.
I post two sentiment indicators, of which this one has reached very bearish levels, if compared to the levels reached in previous crises (blue circles).
This other one is more oriented to the sentiment of retail investors and, as we can see, has reached bearish levels much more extreme than we have seen since the 90s.
Another peculiar data is in this chart, which represents the worst April ending in the history of stock exchanges (remember that April is usually one of the most bullish months of the year).
As you can see, this April ending was the worst since 1938, that is, since the outbreak of World War II.
Finally, this chart represents the yields of government bonds of the various countries of the world, calculated country by country, adjusted according to the GDP of each country and finally collected in average values.
Here again we see that the situation is comparable to very serious historical events of the past.
The precarious situation of the government bonds of the various countries (reflecting the difficulty of their economies) is the reason why all states continue to accumulate US dollar-denominated government bonds, to compensate for losses.
That's the reason why the dollar is the only asset that has been steadily climbing these months, while everything else denominated in dollars collapses or struggles to maintain some stability. I'm talking about valuables, crypto, emerging market stocks, etc.
It seems to me that the picture is clear: Powell will be making decisions today in a scenario where America, although already showing signs of economic slowdown, is the undisputed dominator of the global economy.
The Fed's currency reflects this dominance, which has reached record highs.
And the U.S. stock market shows an extreme divergence between this extremely favorable economic situation and stock prices, now at unrealistically oversold levels.
This table shows the divergence between the profits of listed companies and their very low quotes.
In my opinion it is the most important table to keep in mind in this period: divergences of this type have always returned to equilibrium, from the 30's to today.
So a violent ascent of quotations towards values more in line with the value of listed companies is a statistical certainty.
That doesn't necessarily mean that everything will go up today after the conference. On the contrary, there could be a further descent.
But if there were, it would only accentuate these really extreme situations that we have described, loading like a spring the future upward climb of many stock exchange assets.
Thanks for reading.
