Money stock is all that is driving the market

I am trying to keep track of a few events to make sense of what is going on right now in the markets. We understand that QE has been the only driver of equity markets since the GFC in 2008. Further to this point there seems to have been an even more concentrated effort starting in 2013 for central banks to completely take over the price discovery in the markets. The stock buy backs with cheap money and other back door operations that we have no idea about. The gold price had dipped in 2012 and then started to recover until the beginning of  2013. The recovery was promptly ended and gold was pushed into a long term downtrend. This was of course to give the illusion that there was no need to hold gold as a safe haven. When there is so much money in the system it has to find somewhere to go. The money velocity has been in decline since 2000 so we know that the money surplus has to be going into the stock market.

M2 money supply in the U.S. is continuing to increase rapidly.

M2 money velocity in decline since 200. This chart shows that the money from QE has not made it's way into the economy. This is also consistent with other economic indicators.

Gold decline begins to gain momentum from early 2013. This article is well worth a read explaining what the role of gold is in the new normal. See here  

 

 
I read the book by Jonathan Cahn which was called Harbinger last year. I wrote a couple of posts about Shmita. (See posts here and here). It is said that the Shmita year would start with a small correction. I wasn't sure what to make of it. I thought it was interesting but didn't really expect too much. As you can see the market did exactly that. It sold off at the exact start of the Shmita year and the decline only ended when Fed speaker Jim Bullard mentioned that QE4 could be a possibility. The key date for the large correction is at the end of the Shmita year which is September 13th 2015. That is the date I will be watching very carefully.

$AAPL has been a major beneficiary of the loose money that is being used to buy back stock to artificially improve earnings and give the appearance that every thing is fine. That game will only last as long as interest rates stay near zero.

The market volume has been suppressed and we are seeing new highs in the S&P 500
(Charts below source: @Not_Jim_Cramer) 

 

 Forward earnings and macro data have collapsed this year as stocks soar.

Global GDP expectations continue to decline sharply as stocks soar.