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DrStool

Twin Towers - 2/12/20

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If the ES is only up 11, is that a bear market? More on this later on CNBC, Markets In Turmoil

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LEE'S FREE THINKING

Les Dents de La Mer, AKA Jaws! Stock Market Trading Setup for Tuesday, February 11, 2020

by Lee Adler •  • 0 Comments

ES Futures Hourly Chart

The Great White shark is closing its jaws. Bears have been eaten and digested already. Now it’s the bulls’ turn.

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Eventually, they will want to run it through 3400. But the dealers will need more inventory. They'll run a hard shakeout from 3390-95 is my guess. 

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The Fed should say, without any question of doubt they should say such things,  that the Dealers were no longer allowed to have their trading desks do transactions on their own accounts with the the proceeds of the repos. 

I know, before hell freezes over. I mean such things are so blindingly obvious but 99% percent of people don't have a clue what I said above means. I mean it would be blank stares.  Trying to figure out what language i was speaking. 

In the meantime Elon is going to build starships.

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That's exactly the opposite of their purpose and the opposite of how it is supposed to work. The Fed actually asks the dealers every day at their AM conference call what they need to finance their securities inventories. That's why on September 16 they pledged to do Not QE Infinity. The dealers told them that there's no choice. The higher the market goes, the worse the pressure is on the Fed to continue, because the leverage isn't going away. 

Deleveraging would be both the solution and the problem. The solution can never be allowed to happen. 

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What's going on is sickening. We know what's happening, why and how it's happening. And we can see what's coming with great clarity. Which makes it even more sickening. 

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His drug for the people was SOMA. 

The Fed's System Open Market Account.

From Zadar, Croatia,

Good night, and good luck. 

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It's the sheer degree.  It's wacked.  It  isn't supposed to work like this or do I have to discuss the semantics of 'supposed to'  As a pure racket.  There are those excess reserves in the system let's recall. 

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The NY Fed website spells out that they have a morning meeting with the Primary Dealers to discuss what they need to finance their positions as part of the daily plan of open market operations. 

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