An important low is due right now but bears have a chance to break the market. This report shows you the setup and gives you…
Surprise, surprise! They pumped the money in but the market didn’t rise.
The Fed has been in the process of pumping $88 billion into Primary Dealer accounts this week in the form of its regular monthly MBS purchase settlements. Most of it is done. $22.7 billion of it will settle on Monday September 21. That will be the last MBS settlement until October 14-21.
Meanwhile, the Fed continues to purchase and settle Treasuries virtually every day. Over the past week that’s amounted to a total of about $37 billion. That means that a total of $103 billion in QE settled this week. That’s how much cash the Fed pumped into Primary Dealer accounts.
It didn’t matter. The stock market sucked gas. Bonds treaded water. It sure looks as though the Fed has somehow managed to magically peg bond yields just below 0.80% on the 10 year. The Treasury issued $104 billion in new coupon paper over the past week and that didn’t depress the market? It’s a miracle.
But isn’t it strange that the amount of QE and the amount of Treasury coupon issuance was virtually the same.
Uh… No.
But some other stuff sure as heck is, and you need to know about it.
Call me a cranky old man. OK. So that’s been true forever. But I’m not convinced yet that this is a bearish setup. At least in the very short run.
That said, if they can’t poke through 3365 in the early going in NY, I’m converting back to my nat…
Direct from the bowels of the NY Fed
So far, it’s just a triple bottom, and nobody knows whether it breaks or it holds. But if you look closely, if it holds here, it’s 3 higher lows on the ES. So unless they take out 3309, nothing has happened yet. It’s just a downtrend within an uptrend …
The breakout extended for a bit but now coming back to earth. Is this prep for relaunch, or will the rocket crash back to the pad?
But it faces a lot of overhead from 3419-23. Hourly indicators uptick from high levels, normally a bullish sign that usually leads to trending mode of indefinite duration.
The setups have strengthened. Subscribers, click here to download report. Try Lee Adler’s Gold Trader risk free for 90 days!
At 5:30 AM in New York, the ES has turned up, broken out, and reached resistance.
The economic rebound from the depths of the pandemic panic in April and May has ended. The economy may be rolling over again. Bad news for workers and consumers, but not necessarily for investors.
The US Government did no pandemic relief spending in August, and none is on the immediate horizon. Despite that, the monthly budget deficits are freaking enormous and frightening.
Tax receipts are weak and they will provide no relief from those deficits. The US Treasury will continue to borrow massive amounts of money in the markets.
Sounds like bad news for the stock market, right?
Eh, not quite. Here’s why.
Friday’s low on the ES was a fraction higher than Tuesday’s, but as of 5 AM in New York, they hadn’t cleared Fridays high, and there’s been a slight downtick from the test an hour ago. Hourly indicators are still bullish…