The Fed gives Primary Dealers money every day now. The dealers use that money to buy Treasury paper from Uncle Sam. Whatever the dealers don’t need for that purpose, they use to create mischief in the financial markets. You really need to know how much money they’re getting, how much they need, and how much mischief is coming as a result, every day. I’m happy to help you get that information.
There used to be enough to absorb the pounding of daily gargantuan Treasury paper issuance, but $15 billion a day is way short of enough. We saw the results in the stock market yesterday. Something has to be liquidated to raise the money to pay for all that nice shiny new Treasury debt toilet paper that everybody wants but nobody can pay for.
What does it mean, then, that the futures are up overnight.
The ES futures have broken the uptrend line from the March low. Is it healthy or ominous?
The Fed is throttling back on its market supporting QE operations. The results of that may be starting to show up in stock prices. Is the Fed worried? Should you be?
The Fed has created the illusion of functioning markets, but today futures traders are striking back. The Fed, with all its trillions, may not have the control that it wants, and Wall Street wishes. Today looks pivotal in that regard.
Here’s a table of today’s Fed QE purchases. How much bang did the Fed get for its bucks?
That was a perfect setup for a launch at the bell yesterday. A lot of big boys knew what was coming and how to position for it. Then just after the bell news came out that a drug being tested for treating COVID19 was showing good results. BOOM!
Is this liftoff, or a launchpad explosion?
Here’s a table of today’s Fed QE purchases, but this isn’t the whole story. What happened yesterday, that nobody reported, is.
Futures were backtracking all morning, then a truly horrible, but expected, jobless claims number came out. So of course the futures rallied to resistance. Here’s what to expect in regular trading hours today.
Futures are breaking support. Here’s where they’re headed today. Trade it as you see it.
