As is so often the case for FOMC meetings, the market has moved to a critical technical inflection zone, prepared to go either way. In the very short run, today is the fourth day since the last cycle low, and the previous cycle lasted 4 days. The hourly oscillators are in a bottoming zone. The 5 day cycle projection is around 3090. So a few more points, and we’d have a perfect setup for one of our very short term cycle lows.
On the other hand. On the two days of the meeting not much usually happens. The real action starts when Dr. Jay opens his pie hole and starts spewing shit.
As to a liquidity explanation for yesterday’s selloff, we have one ready. The US Treasury sold $51 billion in T-bills last week that settle today against a $10.5 billion coupon paydown, for net issuance of $40 billion. That’s going to leave a mark. Another $9 billion in net new T-bills settle Thursday. That should end that. From here, we should see a steady diet of, if not outright paydowns, at least non-issuance, as the debt ceiling restricts issuance. Of course, Dr. Yellen and Co. will play games with internal government funds to allow coupon issuance to continue as Mr. Minuschin did in the last go round.
For moron the markets, see:
- Swing Trade Screen Picks – Bulls Win This Week January 30, 2023
- Stock Market Heads for the Super Bowl – Oddsmakers Pick the Bulls January 30, 2023
- Gold Takes a Breather January 27, 2023
- Composite Liquidity Should Be Bearish, Here’s Why It’s Not Right Now January 26, 2023
- Swing Trade Screen Picks – Energetic Buys and ShortsJanuary 23, 2023
- Nothing is BrokenJanuary 23, 2023
- Gold Going Higher January 18, 2023
- Swing Trade Screen Picks – Whoa! Just Wait Till Next Week! January 17, 2023
- Long Live the Bear. The Bear is Dead January 17, 2023
- A Funny Thing Happened on the Way to the Debt Ceiling January 16, 2023
- Withholding Taxes Are Soaring January 6, 2023
If you’re serious about the underlying forces of supply and demand that drive the markets, join me!
If you are a new visitor to the Stool, 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.
