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How to Buy the SPAC Market, Greased Poles, and Crapto 2/31/21

This is a syndicated repost courtesy of Stool Pigeons Wire at Capitalstool.com. To view original, click here. Reposted with permission.

They say that bull markets climb a wall of worry. Being from Philly, I am familiar with a different concept, which I think applies here. Back home in Phulllufya, cops grease light poles to stop the idiots from climbing them when one of our sports teams wins something, once every couple of centuries.  People climb them anyway.  When they slide back down, woohoo, they get a nose full of Crisco.

In this market, bullish traders keep climbing the poles, because bulls are always winners. Then we keep getting these intraday slides. But the trends reappear and the boyz slither right back up.

Uptrend channels get busted, and then a new, wider one forms. It’s ornery, disconcerting, and  hard as hell to trade. Slide down, climb up. Slide down, climb up. Top out here, top out there. Bottom here, bottom there. They’re killin’ me, I tell ya! Technical analcysts can’t get no respect.

Maybe there’s something to be said for buy, hold your nose, and hold. Which is exactly what Lord Jaysus and Secretary Janet want us to do. Never sell.

Meanwhile, rocket scientists create these empty shells called SPACs,  and sell them to “investors” who want to buy nothing. They don’t care what it is, or what it does. Nothing sells. Nothing is the only thing that matters. That and a rising price, which is everything if it’s nothing. What does your SPAC own? “Nothing.” Good, I want some of that!

So Wall Street creative types are happy to oblige by creating ever more supply of nothing for the market to absorb. The funniest thing is, when the use the cash to buy a real company, since they control it, they can then skim the revenue, on top of the fees they paid themselves when they created nothing.

It works just like the medical business in the US. Create a huge ownership/management class to skim billions and inflate costs, while paying off politicians to keep the skim going at all costs.

This is how Wall Street has always operated.

Who cares if the stocks don’t have a business. Does Bitcoin have a business? WTF are people buying with that?

I want to start the first craptocurrency. Buttcoin. Everyone will be able to make it, and no electricity will be required. Just fiber. We can all eat fiber, make a few buttcoins each day, and be rich. That’s how it works, right?

This morning at nearly 5 AM in New York and 11 AM here in central Europe, we’re looking at another rally, with a 2-3 day cycle projection of 3920. Forget the 5 day cycle for now. As dominant wave amplitudes have risen, frequencies have gotten shorter. There’s a lot of noise and, as always, plenty of randomness.

As you see on the chart of the ES fucutures, there’s still a big downtrend channel alive here. They hit the top of it in the last hour. At 3900, they would edge above it. So watch for that. If it gets there and holds or continues, then I think we go back to test the high of 3937. At the moment, the 2-3 day cycle projection is 3920.

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Click to engorge

We have our usual Primary Dealer Fed QE (free report) injection today, of a non-material few billion.

The Treasury injected $25 billion into the accounts of dealers and other big money managers yesterday with T-bill paydowns. It’s doing another $30 billion tomorrow.

That helps buoy prices further out on the curve as the recipients of the cash on the paper being redeemed can’t roll into similar short duration paper because none is available. So they go out a few years with some of it. And some of those dastardly money managers even park some of it in stocks. They like blue chip dividend payers, but as the Dow goes, the market follows.

These T-bill paydown cash injections now look like a regular thing. I cover it in depth with projections, schedules, forecasts, and suggested strategies at Liquidity Trader.

To post your observations, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.

 

Meanwhile, here’s some free stuff I’ve written about this unfolding catastrophe.

US Treasury Injects Another $30 Billion Into Market

 

Treasury Announces It Will Inject ANOTHER $25 Billion For $125 Billion Weekly Total

Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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