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Fasten Your Seatbelts While We Wait for the Fed Rescue 3/17/21

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And maybe brace for impact.

13 hours ago, Jorma said:

I used to imagine Bernanke going home at night  in late 07 and curling up into a fetal position.  Instead it seems he had total confidence and he even went on TV and said so.  Confidence today is double or triple that. Right?

Bernanke is a monster. Always has been and always will be. He destroyed the wealth of millions of honest, hard working, risk averse Americans, mostly elderly, just to transfer their accumulated savings and spending power to criminal bankers and speculators. The very same bankers who had already raped the system, whose criminal schemes caused the collapse. 

Instead of punishing them, Bernanke rewarded them and punished the innocent.

The cost, not only to the direct victims, but to society at large, has been incalculable. It was a bargain only the devil incarnate would have and could have made. 

My fondest hope is that history finally comes to revile Bernanke as the mass murderer of America's finances that he is. We are paying a terrible cost for the moral and practical abomination that his policies set in motion, enshrined as religious dogma, and indeed, set in concrete. They can never be reversed. They can only be made ever more extreme, until one day they stop working.  

Well, today's the day.

Not that day. The day we find out whether the Fed owns up to having yield controls and infinite QE ready to go as the next logical step, indeed the only possible step, in Bernanke's abomination. 

My guess is that Lord Jaysus will run the old soft shoe and downplay the mortal dangers that falling bond prices are causing to the Primary Dealers.  And through them, the markets, and the financial system as a whole are threatened with virtual extinction. Jaysus will be very calm as always, saying, in not so many words, "Remain calm, all is well. I am the Lord of the Fed, and I am with you. Praised be my glorious name forever and ever. Amen. Next question, you over there, yes, you Liesman. May I have your softball, thank you. " 

But all is not well. A storm of catastrophic proportions is heading our way. The Treasury has spent the last 3 weeks sandbagging to the tune of a quarter of a trillion sandbags, with more to come. But it hasn't been enough.

And it won't be enough. With stimulus spending ramping up, they'll be running out of sandbags sooner rather than later. The flood will arrive. At that point it will be up to the Fed, and it's not even clear to me that another Fed rescue, while likely to be unfathomably massive, will work yet again. 

Fed and US Treasury Are Ensuring that Macro Liquidity Stays Bullish

 
 
If the quarter trillion that the Treasury has already thrown at the market is working, you could have fooled me. Let's look at the TLT, the 20 year Treasury ETF. Look at all the inventory the dealers have accumulated at the permanently high plateau that bond prices reached. 

tvc_bee9bb366f68e6b16b3f63b30c0aa0a0.png

 
I don't even think that the system could survive with bond prices at this level, given the amount of inventory that dealers accumulated using 90% leverage, or more, at that permanently high plateau. The only thing allowing even the hint that all is well and there's nothing to see is that quarter trillion that the Treasury pumped in over the last 3 weeks.
 
There's a reason why the Treasury started flooding the system with cash using T-bill paydowns on February 23, rather than waiting for the stimmy to pass and spending its cash on that. That reason was that Primary Dealers were collapsing. Even with $200 billion of Fed cash per month, they had run out of money. That's my judgment, for what it's worth. 
 
And yes, it is $200 billion, not the $120 billion the idiot media keeps parroting. They're ignoring a key component of the Fed's operations. I get into that here.  
 
If you want to clearly understand just what the hell is going on, you won't get it from the Wall Street Journal and CNBC. I spell it out for you. And if it's still not clear, write to me, and I'll address your questions and try to do better at explaining things in my next report.
 
Yes, it's esoteric if you haven't been looking at it for 50 years. To me, this stuff is second nature because I've been staring at it for so damn long. I want to bring you along with that experience so that you have little doubt about where things are headed. 
 
Unlike mainstream Fed analcysts, Wall Street isn't paying me. I'm not on the take. I'm not beholden to the Fed's and Wall Street's goddamn  propaganda. I am beholden only to my subscribers, and to whatever meager trading profits I'm able to skim out of this system based on my observations and experience. 
 
As Jorma pointed out, confidence is key not just to the manipulators, but to us. Confusion is the enemy, and Wall Street does its best to keep us in a permanent state of confusion so that it can pick our pockets. Distract the mark, and pick his pocket. That's Wall Street. No different than the criminal families that prowl Las Ramblas or the Paris Metro. 
 
The Treasury's rescue operation still has a lot of cash, but they're now required to spend $1.9 trillion in stimmy. They're going to run out of money, and it won't take all that long. I've done some back of the envelope calcs in my Liquidity Trader Money Trends reports on how long the money may last, and when the crunch is likely to hit.
 
Yeah, the one that destroys the financial system. That one.  Are you ready for it? Are you prepared to profit from it? Because if you're positioned correctly, there's a fortune to be made. 
 
Just remember that while the Fed and Wall Street media only wants you to think about yield, yield is not the problem. It's the mirror of the problem, but not the problem itself.
 
The problem is bond prices, not yields. Leveraged bond inventories of Primary Dealers are way under water. The dealers are getting crushed. They are going to bring down the system yet again, just like in 2007-08 when they were positioned massively wrong.  
 
On that happy note, let's look at today's ES fucutures hourly chart.
 
They're holding on, just waiting for this afternoon's elephant and clown show, led by Ringmaster Jaysus of the Ringling Brothers Barnum and Bailey Fed. Wait. Is he a circus master or religious deity?
 
Both. Obviously. 
 
3950 and 3944 are the key support lines here in the pre market. If they don't hold, there's another 10 points or so to the next support. Nothing dramatic. I'll update you during the day, and after Jaysus's walk on water act this afternoon.
 
tvc_47f5abf00d5d71feeee71de182b136c4.png 
 
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Got it. Added link to https://www.goldsilvervault.com/

is that the famous vaccine needle formation?

Here is the list of charts my screens spit out today. This is unfiltered. These are not recommendations.  I figure you stoolies know enough that you can look at some of these on your own charts and do with them what you will. I will pick a few to add to my ready list for my trading  today. Those I will not share with you. 

I also use these lists, particularly the weekend run, for my chart picks in the weekly Technical Trader reports. After running the screen, I eyeball the charts for the best risk/ reward setups for swing trades.  

Symbol Buy Sell 500 200 125 50
BIIB.O 1 0 0 1 0 0
BMY 1 0 0 1 0 0
CHTR.O 1 0 0 1 0 1
KO 1 0 1 0 0 0
CCK 1 0 0 0 0 1
LSCC.O 1 0 0 0 0 1
LBRDK.O 1 0 0 0 1 0
MXL 1 0 0 0 0 1
ON.O 1 0 0 0 0 1
TER.O 1 0 0 0 1 0
UBS 1 0 0 0 0 1
EGHT.K 0 1 0 0 0 1
AEE 0 1 0 0 1 0
ARLO.K 0 1 0 0 0 1
CLSK.O 0 1 0 0 0 1
DUK 0 1 0 0 1 0
KODK.K 0 1 0 0 0 1
ELYS.O 0 1 0 0 0 1
FDX 0 1 0 0 1 0
HSIC.O 0 1 0 0 1 0
INSM.O 0 1 0 0 1 0
LHX 0 1 1 0 0 0
NNN 0 1 1 0 0 0
PPL 0 1 0 1 0 1
RPAY.O 0 1 0 0 1 0
UPS 0 1 0 0 1 1
VKTX.O 0 1 1 0 0 0
WAB 0 1 0 0 0 1
Totals 11 17        

There were again only 28 charts with good signal setups out of the 9000 listed issues that I screen. That's the same number as yesterday, but with one big difference. It's the first time in weeks that there were  more sells than buys. 

The screens weed out those selling for under $6 and where volume averages less than 1 million shares a day. That usually leaves about 1500-1600 that get the technical analysis treatment. 

A week ago they were spitting out 100 good signal charts for a couple of days. Now there are far fewer. That's a normal part of a maturing move.  Also, last week 95% of the signals were on the buy side. That changed yesterday when only 75% were bullish. Today, the majority are sell signals.  

You heard it here first. Now I'm going to look at these and see if there are any worth buying or shorting today. 

Go ahead and pick through the list. Feel free to post your thoughts and upload your charts. 

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It's weird. I get no feedback whatsoever on anything I write or tweet. Nothing. No positive. No negative. No questions. Zilch. 

There's only one possible conclusion.

No one reads it. 😆

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3 minutes ago, DrStool said:

It's weird. I get no feedback whatsoever on anything I write or tweet. Nothing. No positive. No negative. No questions. Zilch. 

There's only one possible conclusion.

No one reads it. 😆

Perhaps there is another, Occam's Razor-type conclusion--only you and Jorma understand it. 😃 I generally try (with middling degrees of success) to refrain from commenting on things that make me look even more stupid than I am, to the extent that is possible. My market-related musings are bad enough. 

So, if it's any consolation, there are dummies out there reading your stuff. "We don't know, and neither do they" has been an adopted mantra of mine since I have been following the Stool for lo these many years.

Speaking of Occam's Razor, I have always been more of a Hanlon's Razor guy. But with Bernanke, for me it has generally been a tossup. I had always wanted to believe in the past that he was an idiot, but maybe he is just evil. 🙂 

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8 minutes ago, PullMyFinger said:

Perhaps there is another, Occam's Razor-type conclusion--only you and Jorma understand it. 😃 I generally try (with middling degrees of success) to refrain from commenting on things that make me look even more stupid than I am, to the extent that is possible. My market-related musings are bad enough. 

So, if it's any consolation, there are dummies out there reading your stuff. "We don't know, and neither do they" has been an adopted mantra of mine since I have been following the Stool for lo these many years.

Speaking of Occam's Razor, I have always been more of a Hanlon's Razor guy. But with Bernanke, for me it has generally been a tossup. I had always wanted to believe in the past that he was an idiot, but maybe he is just evil. 🙂 

Yes, I'm with you PullMyFinger .. technical stuff (like charts) I understand but the dark side of financials is a bit of a struggle to come to grips with.

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12 minutes ago, PullMyFinger said:

Perhaps there is another, Occam's Razor-type conclusion--only you and Jorma understand it. 😃 I generally try (with middling degrees of success) to refrain from commenting on things that make me look even more stupid than I am, to the extent that is possible. My market-related musings are bad enough. 

So, if it's any consolation, there are dummies out there reading your stuff. ............................

 

i could not have come close to saying it better...

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Yep. That's it! But you guys aren't dummies at all. You're geniuses at what you do. I know that my stuff is impenetrable to most people.  

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I wish that you'd ask more questions, because the silence allows me to keep doing all the things that keep people at a distance. 

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10 minutes ago, DrStool said:

I wish that you'd ask more questions, because the silence allows me to keep doing all the things that keep people at a distance. 

OK, just remember--you asked for it . . . 

I think Reddit has a page that is entitled something like "Explain to me like I'm five." That should do it for my comprehension level when you answer questions. Just emulate Trump's speech delivery level, and you'll have it. 🤣

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I'm losing money in the mock it today.  

Serves me right. I shouldn't even think about trading on Fed day. 

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4M ES chart (June) for any over-caffeinated types that like the jittery stuff. MM (horizontal) lines and planetary flux lines (aqua diagonals) have been doing a decent but not perfect job of containing moves and reversing last couple of days. But I'm not touching this thing today. Had my fingers burned so many times on Fed days previously that it's amazing I can even type with all this scar tissue. 🤡

Screen Shot 2021-03-17 at 10.19.41 AM.png

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