Flush with government largess on election eve, the market rocketed higher on Monday. The Fed pumped in $10.75 billion with overnight repos. They conveniently had scheduled no expirations today. Last week, the Treasury announced a $25 billion debt paydown in the three year and 10 year note refunding, only half of which will stick around, and then only for a week or so. Still $12 billion is a lot of scratch for a few days. In effect, the party in power threw a power party, between the Fed and the Treasury giving the market a $23 billion one time shot in the arm, and the Pat Paulson rally was suddenly revitalized. It all began the day he was sworn in, and over the last couple of days, more markers were placed to tilt the playing field in favor of the desired outcome. Click here to download complete report in pdf format (Professional Edition Subscribers).
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