The Fed drained for the sixth day in a row, as it continued unwinding the huge holiday liquidity bulge. It drained a net of $0.75 billion with $2.5 billion in overnight repos against expirations of $3.25 billion. That’s now $26.5 billion in drains over the last six days. The ending of the massive seasonal up thrust has tended to coincide with the beginning of top formation in the stock market in each of the past three years. It’s beginning to look like this year will be no different. However, it should be noted that it takes a couple of months for the top to unfold into a correction. Don’t expect a one day turnaround. Click here to download complete report in pdf format (Professional Edition Subscribers).
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