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ES Futures Hourly Chart

Right Shoulder, Right Shoulder- Roll Over, Roll Over

The dealers got a windfall from the Fed over the past couple of days. They used that to foment a rally in stocks. But it has been kind of puny relative to what we’ve gotten used to in recent weeks. And it looks suspiciously like a potential right shoulder of a head and shoulders top pattern on the hourly chart. 

Of course, wishful thinking will kill you as a trader, and seeing a potential right shoulder is wishful thinking.

Fed QE

Give Us This Day Our Daily Fed – April 23, 2020

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.

S&P 500 ES Futures Chart

With Fed QE Now On Hold, Stocks Bounce Miraculously

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.