Hughesair (Inflection Point)

Popendrau or no Popendrau , our market liquidity sucks. The DTR reports: -5.77 billion short of last year on Thursday. Month to date totals a -11.1 billion and fiscal year to date comes in at -2.6 billion as compared to a year ago on the same date. The DTR, daily tax revenue, reflects closely the buying power of all market investors. Sometimes called the L2 this year over comparison closely correlates with market movement statistics.

I’ve been away, but the market never goes away. I guess we look under the carpet for any positive signs. Liquidity may be such a sign. Daily Tax Return is a short-term indicator of liquidity and thus short term, 4-5 days, market movement. Not 100% reliable, but comparing year over daily change, predicts market movement, statistically, better than most. Last Friday 7.84 b collected versus a year ago Friday of 5.28 b., a plus 48%. For the month, we are a hair less than even, and for the fiscal year – 9 mo. – we are a half a percent ahead. This is not earth shaking but the economy, reflected in personal and corporate income, is crossing the line going up at a point on last year’s line that was going down. The crossing point may be a good omen.