As Fast As Possible, But Not Yet

Chips, soda, and neck pillows for sale at the CNBC kiosk in Atlanta's Hartsfield-Jackson International airport. One TV monitor stuffed in back. Very 1999, perhaps. But not very on-strategy. Or maybe it is . . .

Today's central bank strategy is to fight deflation at all costs. It's getting scary.

Draghi Says ECB Must Raise Inflation as Fast as Possible

When you hear a central banker say "as fast as possible" regarding to inflation, it's not structurally bullish; it's fear.

Fear of deflation (a contraction in the amount of credit outstanding) due to slowing credit creation.

And it could be happening in China, too.

China’s PBOC Cuts Interest Rates for First Time Since 2012

Wang Tao, chief China economist at UBS AG in Hong Kong was quoted in the Bloomberg article that "real interest rates have moved up significantly" in China.

Not good for credit creation, i.e., getting people to borrow more money.

Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong was quoted in the same Bloomberg article as saying the rate cut is “indicating the worsening economic situation and rising deflation risk.”

Yes, markets love central banks easing. But at some point, as it always does, reality sets in.

However the markets, especially the S&P, are still saying "not yet."

There was the potential for a Fib extension yesterday down to 2036.43 that was blown out shortly after the open.

The overnight futures action points toward 2072.20-2095.06, two Fib extension targets that once seemed outlandish but are now possible.

What is also possible is a false breakout and reversal...Turtle Soup. 2056.08 should not be messed with for any reason or else it could be soup's on, as in bulls standing in the soup line.

Atlanta is now one of my favorite cities. I had an absolute blast there.