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Just when it looked as if the market would go over a cliff, out came the dip buyers again. I guess they can read the charts, because the turn came from just above a key long term sport level at 3761 and the juncture of several trend channel lines that just so happened to be almost exactly where the market descent stopped. It’s magic!
Was it the Fed? Was it the PPT? For one thing, the US Treasury has pumped an insane amount of cash into the market since December 6, a total of $107 billion in T-bill paydowns. Some of that was needed to help absorb mid month coupon issuance, but the rest is slosh. Play money for dealers and big hedgies.
About half of all T-bill holders are dealers, so you do the math. The US Treasury is pumping a gusher of cash into the accounts of securities dealers. And when they have excess cash, dealers will do what dealers do. Accumulate stocks at reduced “wholesale” prices, send their proxies out on CNBC and WSJ to tout their wares, using sexy made-up narratives about why stocks are a great buy here, mark em up and move em out to retail.
Retail to them isn’t you and me, by the way. It’s their horde of clueless institutional clients watching CNBC at their office desks, while pretending to earn management fees running your retirement money. They’re the biggest, dumbest herd of them all. Wall Street likes to pretend that retail traders are the dumb money. But to the sell side, the only dumb money they care about are the dolts running trillions in retirement funds and wealth funds. They’re the herd. The rest of us are the droppings that both the sell side and the buy side like to step on.
Will this uptick carry through year end as usual? Why not. $17 billion of that $107 billion will hit the market on December 27.
From the perspective of today’s trading, in the US, 24 hour S&P futures, the 3830-3850 range is now the established battleground. Nothing happens until they get out of that range one way or the other. Below 3830, bears have a shot to take it back, perhaps as far as 3760. But if they clear 3850, the next target would be 3885.
Not much excitement either way.
Jingle Coin, Jingle Coin, Jingle all the way.
7:21 AM ET
Need an hourly close below 3829 for an intraday reversal pattern.
For moron the markets, see:
- The Trend Was the Bears’ Friend December 19, 2022
- Swing Trade Screen Picks – Short Stops Killed but Many More Added December 19, 2022
- May Gold Be Merciful Unto Us, Amen December 19, 2022
- Fed Steadfast But Treasury Throws a Bullish Curve December 14, 2022
- Federal Tax Revenues Are Slowing December 6, 2022
- Fed Policy Will Stay Bearish Until It’s Too Late November 20, 2022
- The Repeal of Rule Number One, Don’t Fight the Fed November 14, 2022
- Bond Market Rally is Technically Valid but Belies the Facts November 12, 2022
If you’re serious about the underlying forces of supply and demand that drive the markets, join me!
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