Support the Wall Street Examiner! Choose your level of support to receive a free proprietary report as my thanks. Click the button below to see your options. Become a Patron!

Who Knows Where Stops Lurk in the Hearts of Men, The Dealers Know 5/4/21

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

Call it a pothole. Call it a mini flash crash. We’ve had a few of these lately, and yesterday’s was epic.

I call it, Dealers Shake the Trees. They’re low on inventory because of relentless customer buying. They needed to shake some loose before the relentless US Treasury liquidity tsunami put so much cash into the pockets of their whale customers, that it starts burning holes in their pockets.

The US Treasury is pumping ungodly amounts of cash into big investor (and dealer) accounts. $91 billion in the second half of April. Another $55 billion just this week. And yet, massive inflows of taxes in April, and now extending into mid May continue to refill its coffers. It is STILL sitting on just under a trillion bucks in cash.

This money is ON TOP of the $180 billion or so per month that the Fed pumps into dealer accounts in QE, month after month.

As a result, we get charts that look like this. All the dealers need to do to build inventory is to play off news like Yellen saying yesterday that interest rates will need to go up, of the announcement of a proposed capital gains tax increase. Get a little selling going, the bots and AI triggers, and away we go. The dealers take prices down through the stop levels, and BOOM, suddenly, it’s all gone and we ridiculous shit like this on the charts.

 lick 3 times to enlarge fully

This will get worse. The flash crashes and rebounds will get bigger. When the turn finally comes, and we have a pretty good idea of when that will be, we will witness, and hopefully profit from, one of the greatest crashes of all time. It’s coming. But not yet.

The new 5 day cycle projection is 4215.

This is a syndicated post, which originally appeared at Stool Pigeons Wire at Capitalstool.comView original post.

If you are a new visitor there, please register and join in! To post your observations and charts, 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.


Gold Going Nowhere, But We Have Mining Picks to Swing

Edited  by DrStool

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, 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. 

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.