• 848 days Will The ECB Continue To Hike Rates?
  • 849 days Forbes: Aramco Remains Largest Company In The Middle East
  • 850 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,250 days Could Crypto Overtake Traditional Investment?
  • 1,255 days Americans Still Quitting Jobs At Record Pace
  • 1,257 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,260 days Is The Dollar Too Strong?
  • 1,260 days Big Tech Disappoints Investors on Earnings Calls
  • 1,261 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,263 days China Is Quietly Trying To Distance Itself From Russia
  • 1,263 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,267 days Crypto Investors Won Big In 2021
  • 1,267 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,268 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,270 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,271 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,274 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,275 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,275 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,277 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Why Should Investors Watch Inflowing Liquidity?

Liquidity levels ... they are important in companies, banks, AND the stock market.

Think about it ... when Liquidity levels rise, it means that there is more cash coming into a company and that means they can expand, hire more people, invest in machinery and so on.

In the stock market, rising liquidity means that there is more money chasing stocks and that means rising prices. When net liquidity is in contraction, then there is often not enough money to purchase the stocks many want to sell. When that happens, investors have to lower their price to get a buyer and the stock market falls.

Sometimes, like now, the Liquidity levels are in Expansion territory but decreasing. (Today's chart is presented as a courtesy to our free members and is posted daily on our paid subscriber site.) If you look at today's Long Term Liquidity Flow chart, you can see that the inflowing liquidity went into a trading range from May to June.

And then, in mid-June, it broke the trading range's lower support. You know the definition of a down trend ... a down trend has lower/highs and lower/lows. Since mid-June, the inflowing liquidity has been making lower/highs and lower/lows.

If this continues, the market will continue to sputter and lose steam. It will take a revival of increasing liquidity to send the market back up in an enthusiastic rally mode.

 

Back to homepage

Leave a comment

Leave a comment