Did The Market Just Enter Another Crisis?

Friday’s sell-off was the worst day since BREXIT.

BREXIT was supposed to be a crisis, but the Central Banks ramped the markets higher to maintain the narrative of their omnipotence.

Because no one believed the ramp job, the bulls didn’t want to commit to buying at new all-time highs. But because the Bears got shredded from the manipulation, they were scared to sell.

The end result was a 40-day snooze fest of a market in which stocks went nowhere. This was a 1 in 100 year event.

Now that markets have finally broken out of this range, the question is whether another crisis has hit.

Thus far the Central Banks have been able to keep a lid on this collapse.  But for weeks they’ve been acting terrified of something.

Consider that the Bank of Japan and European Central Bank are both openly discussing helicopter money and other more extreme monetary policies.

Why would they be doing this when they are already engaged in a combined QE of $200 BILLION per month? This is the fastest pace of QE since the 2008 Crisis.

In the US, we have Fed officials discussing everything from NIRP to cash bans. Bear in mind, this is during a period in which the Fed is supposedly engaging in a tightening cycle.

And they were doing this at a time when the markets were at new all-time highs???

In simple terms, Central Banks knew something we all didn’t. There was simply no reason to be discussing even MORE extreme policies based on the data nor the stock market.

We believe that the reason they are scared is because they know we are entering the End Game for Central Planning. In the last 12 months Central Bank insiders have been revealing in various statements that they know their policies aren’t working.

As usual, these statements were made via measured language, but the messages were there: We’re running out of ammo.

The market has yet to pick up on this.  But when it does, the REAL Crisis will hit.

Graham Summers

Chief Market Strategist

Phoenix Capital Research