Jump to content

Stock Market on Fire 7/29/22

Rate this topic

Recommended Posts

Stocks are on a roll. The 5 day cycle projection on the ES, S&P 500 24 hour futures has risen to 4115. This morning's high of 4108 is close enough for government work, especially in view of the fact that the conventional measured move target of the base breakout was 4100. The breakout from the higher base this week only pointed to 4085. So the bear killers' work is done here. The shorts have been squeezed to a pulp. 

If they do manage to pop this boil at 4109, then multiple resistance trendlines at 4120-25 should be the endpoint. 


I suspect that will now leave a vacuum of demand, as bulls alone will lack the firepower to keep this going without the shorts. I cover the reasons for that here.  Look, it's not bedtime reading. Unless you like having nightmares. 

To understand and profit from the big picture check out the following. 

If you're serious about the underlying forces of supply and demand that drive the markets, join me

If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter. 

Link to comment
Share on other sites

Sandy Beach mentioned money market funds. Some interesting data here. Not as much growth as you'd think. Retail funds only up $85 billion since December per FRED data, and the OFR shows a persistent decline in government MMFs over the same time frame. This includes institutional MMFs, which are twice the size of retail funds. 


ICI has granular weekly and monthly data. It shows Retail funds up only $40 billion since March, when short term rates began to rise sharply. All of the gain was in non government MMFs. Government MMFs declined. 


Another OFR data set shows how the Treasury's T-bill paydowns forced the MMFs out of their T-bill holdings. That money went straight into the Fed's RRP fund for MMFs. 

MMFs are really a sideshow to the main event, the Primary Dealers. That's what I focus on in my research. They're the house. They run the markets, normally on behalf of the Fed. But the narcissists at the Fed no longer have any use for their strawmen dealers. So the Fed has abandoned them to the whims of their institutional customers. 

The Bond Rally That Fooled The Majority And Didn’t Help Dealers

  • Like 2
Link to comment
Share on other sites

This came in the Syphma daily newslater.

Do you think maybe they're too smug with this "priced in" shit?

July 29, 2022
SIFMA SmartBrief
News on the capital markets  

Morning Bell
Equity investors appear to have priced in a recession, with many seeking bargains amid an economic contraction. Stock futures are up in the wake of news of a second consecutive quarterly GDP decline, with the S&P 500 on track for the best month since 2020.
Full Story: Bloomberg (7/28),  The Wall Street Journal (7/29) 
Link to comment
Share on other sites

This would be a catastrophic loss in the Philly Fed index. 

Link to comment
Share on other sites

38 fibo at 4090, that would be to prominent for a top, 4125 or so would be ok. Short at the close today with good risk/reward. Number of stocks trading above their 50 DMA already at almost extreme levels, but not to the downside… 😇

Link to comment
Share on other sites

42 minutes ago, Jimi said:

Nothing matters, because nothing is not unreal. 

Reality exists. 

Only in the mind. 

Link to comment
Share on other sites

2 hours ago, DrStool said:

The 10 year yield is breaking down. Look at that top pattern. 


Hard to believe, Harry.  

Yep. The Fed raised interest rates this week. Every expert says. Never mind the numbers.

I've been saying, the Fed has lost control but lucky for them nobody has noticed. I'm not breaking out the Joy Division hiwever. Not my thing.


Link to comment
Share on other sites

I'm not sure how much short interest there is in Treasury coupon securities plus strategies  to profit from rising rates, some sort of synthetic shorts. ( I don't mean the polyester ones Lee wears to the beach.)  If there is a significant amount of short interest left and it starts to bail?

Link to comment
Share on other sites

This topic is now closed to further replies.

  • Tell a friend

    Love Stool Pigeons Wire Message Board? Tell a friend!
  • Recently Browsing   0 members

    • No registered users viewing this page.
  • ×
    • Create New...