But I’m not worried any more. If the ES 24 hour S&P futures has an hourly close below 4505 this morning, then we can talk. For now, this looks like just another consolidation pending another breakout. Because the Fed’s slush RRP fund is working.
I had been warning that this would happen for a couple years. I wrote that when the Fed’s RRP slush fund starts coming down, it would be bullish. I wrote that the fund would start coming down when the Treasury started issuing T-bills to rebuild its cash account once the debt ceiling was lifted. Now that is playing out as expected. A half trillion has come out of that slush fund as the Treasury issued 3/4 of a trillion in net new T-bills, plus $125 billion in coupons since the debt ceiling was lifted. And all that new Treasury paper is new, perfect collateral for even more private repo and margin borrowing.
And away we go. The technical outlook also keeps reflecting that the system is awash in money.
For moron the markets, see:
- Young Bull Growing Stronger July 17, 2023
- We’re Not There Yet July 16, 2023
- One Small Step For Gold, One Giant Leap for Goldkind July 11, 2023
- July Starts Ugly After Fabulous June July 10, 2023
- Stocks Are Scraping the Ceiling July 9, 2023
- Withholding Tax Rebound Sets Up a Bearish Fed Catch 22 July 6, 2023
- Golden 13 Week Cycle Turn and Other Hopeful Signs 7/5/23 July 5, 2023
- It’s Not Your Daddy’s Liquidity Anymore July 5, 2023
- We Now Know What is Driving the Rally June 20, 2023
- The Fed’s Slush Fund is Working June 16, 2023
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