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Mission Possible 6/29/21

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The ES futures and the broad US market keep churning a little higher day by day. It's a weak uptrend, locked within a couple of narrow rising channels at various angles, from almost flat, to rising at about 10 points per day, woop de doo.  The most important trendline to watch is, I believe, the one running from about 4270 as of 5 AM in NY, to about 4280 at the New York close. The trend will remain intact if they can't break below that. 

The first line of resistance I'd be worried about runs from about 4280 now to around 4290 at the closing bell. If they get through that, then the measured move objective of the base breakout of 4315 or 4350 would both become possible, with the lower target probable. 

The top of a growing megaphone pattern is currently around 4290. 

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Meanwhile,

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30 minute bars nicely show how momentum has steadily faded over the past 5 days. Looks poised for a plunge. End of month Treasury supply could turn the trick.

tvc_0ca9bd32fd7c8e3fbfeb7f90554168b3.png

 

Watch the 10 year yield. It will tell whether supply pressure matters as the Treasury begins cutting back on T-bill paydowns. Janet is giving the market $25 billion today, but after this, that help should dry up.  Things could get ugly. 

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Get the whole story, and every episode of this ongoing soap opera. You'll see it coming. 

Now The Balance Begins To Shift

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THE GREAT CURVE INANITY

Current false narrative

"The FED is behind the curve on inflation"

Reality:

The FED is always ahead of the curve on inflation because it creates it....................

Inflating the money supply is a deliberate and concious act of the Fed.

The FED then pretends to be behind the curve on inflation.

So it does not get blamed for the inflation.

This is blame shifting methodology 101.

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Treasury announced another $25 billion in T-bill paydowns for next week, July 6. They've reduced the pace.  We're getting very close to the end of this.  The paydowns will stop and the RRP outstanding will reverse and start declining.  

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3 minutes ago, DrStool said:

Treasury announced another $25 billion in T-bill paydowns for next week, July 6. They've reduced the pace.  We're getting very close to the end of this.  The paydowns will stop and the RRP outstanding will reverse and start declining.  

seems like they are timing this for quarter end, coincidence ?

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Bills are announced Tuesday's and Thursday's. They've adjusted the schedule a little but the end result is the same.  

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