Now that the US Government has delayed Tax Day for 3 months, the April tax windfall won’t happen. That cash fuels temporary Treasury debt paydowns which in turn fuel seasonal financial market rallies. Not this year.
It seems like the market wants to base out here. But I have a sense of foreboding when I look at the hourly chart. Maybe that’s bullish. I’m often my own best contrary indicator.
New York prices are gapping and reversing daily. It’s madness if you don’t stay up all night trading the fucutures. The dead bodies are floating to the surface.
Where all that Fed cash is going, and where the market is going today.
When the Fed first dropped its biggest Stupid Bomb in history announcing that it would offer a cool trillion a week in term repos, I warned that it was the wrong medicine for the wrong disease and that there would be few takers.
Little did I suspect.
The Fed pretended to fire a bazooka on Sunday with its announcement of $700 billion in market intervention in outright purchases. But it was really a popgun. The futures went limit down again when the market opened in Asia last night and have stayed there.
As fast as they have come down, they have gone up twice as fast overnight. Here’s what it means for today.
The Fed panicked today. It doesn’t know what to do because, as Jeff Snider pointed out, it has no clue what the disease is.
NO! It’s not the coronavirus, as the Fed claims, and litterally everyone believes. So the Fed’s prescription can’t work.
The Fed announced today that it would attempt to stuff $1.5 trillion in short term loans into Primary Dealer trading accounts over the next 3 weeks. OK, but will there be any takers?”
The calamitous triangle break that was pending yesterday morning, happened. We got the usual result. Badda bing, badda boom.
We got the expected rally, but God, it’s pitiful so far. This thing is on the verge of an explosive triangle pattern break.
