The Fed’s balance sheet resumed its growth in August after a bit of a stall in July when dealers paid off Fed repos. That program…
The correction looks benign so far. The 10-12 month cycle projection has risen despite signs of top formation. I have added a couple of mining…
Is it a breakout or a blowoff top? The 5 day cycle projection is 3435. Hey, they can count.
The Fed bought $1.73 billion in Treasury coupons from Primary Dealers today. There’s more to the story.
A short term top and minor correction are due but intermediate cycles still point higher. We have more stockchart picks to take advantage either way.
The Fed buys the paper from Primary Dealers. The dealers act as middlemen or straw men, acting on behalf of the Fed. The dealers purchase newly issued bills notes or bonds from the US Treasury. They in turn sell that paper to the Fed with a markup. That markup is their skim.
The money that the Fed deposits in payment is then their cash to use for trading whatever they want. Usually that includes a big slug of equities, in addition to Treasuries and whatever else they make markets in.
Here’s what they did yesterday.
I have this weird feeling like we’ve been here before.
I can’t quite put my finger on it.
That was yesterday’s lesson. Here’s today’s.
The kerplunk herd round the world.
5 day cycle projection 3412.