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DrStool

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DrStool last won the day on July 29

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    Chief of Stock Proctology

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  1. I just checked. Nothing happening there. So I can't say what the source of funds for the rally is. I reported a couple of months back that the market was historically Dover Sole versus liquidity. So this could be a result of a hidden cash buildup, and short covering. Stocks Are Even More “Dover Sole” Versus Liquidity Unfortunately, while I reported the condition, my analysis and conclusions about it were wrong. The rally has been much larger and more sustained than I expected. Had record profits on trading picks on the long side, but bailed too early, when the short term technical trading screens went to the sell side on balance. In retrospect, the failed sell signals have been a tell that this was something more than a garden variety bear market dead cat bounce.
  2. It's essentially an overnight, interest paying, deposit account for money market funds, banks and dealers. They deposit the cash at the Fed overnight, and renew it daily as they wish. The Fed created it as a money market fund for money market funds that were getting stuffed with cash because the Treasury was taking away their T-bills and paying them back in return. The MMFs literally had too much money, earning no interest, with no place to put it. The Fed set up the RRP facility to bail them out by giving them a place to put that cash and paying them for that in the process. Another bullshit bailout for the financiers and big mahoffs who deposit excess cash in government MMFs. The idea that the Fed lends them securities in return as collateral is just a formalized joke. The Fed doesn't need to give collateral. About 3/4 of this cash came from the paydowns of T-bills over the past 18 months. Most of that is MMF cash that has no place else to go and won't go anywhere else except into new T-bills. Because T-bill issuance has only just resumed, there may be some lag in the drawdowns of the RRP cash from the MMFs as the funds match their cash needs to available T-bill durations. The other 1/4 of the cash that flowed into the Fed's RRP account came from banks and dealers. That's about $500+ billion that might be used to buy longer term fixed income securities and stocks. So far, there's no sign of drawdowns of the RRPs, although they have stopped growing. So the inference is that the source of the cash for the rally in stocks is margin and bank repo, not this fund. The data on dealer repo is available weekly with a 9 day lag but the Fed has made it so complicated to aggregate it that I gave up on it when they changed the methodology last year. I need to hire a programmer to get into the Fed's API and automate the process. Total bank repo and other and bank loans to non-banks is available weekly. I need to update those.
  3. What's crazy is that there's no cash coming out of the RRPs. This rally seems to be fueled by margin and bank repo. Even the bonds are firm today. Not much selling apparent.
  4. But if you go to the daily chart, there's a bigger base breakout that measures to 4700. No comment on that. Just pointing it out.
  5. Going back to the 5 hour bars, the original big base breakout for this move measured to 4235.
  6. I'm not flummoxed very often, but this is definitely flumoxative.
  7. Thanks to running a Windoze update last night, that, unbeknownst to me, did not complete itself, I had to re-run it today. If you have a PC, you are no doubt familiar with this experience, and know how long it can take. I am now so far behind the 8 ball, I don't know which end is up. Thanks Microsoft, you lousy piece of shit monopoly operating system asshole. You suck. This happens about half the time they shove another update down my throat without warning. I always know its them fucking with me because suddenly everything starts to run extra slow, and hangs up, and processes won't complete. You would think that, after all these years, they would have figured out how to do this without fucking everything up. Microshit. Now that that's off my chest, here's the hourly on the ES, S&P fuguetures. THey still need to break 4200 to start anything at all on the downside. To understand and profit from the big picture check out the following. Swing Trade Screens – One Bad Trade Hurt But the Rest Bailed Us Out for a Win August 8, 2022 Fasten Your Seatbelts – Updated Cycle Projections Are Shocking August 8, 2022 “As Good as It Gets” Was Good While It Lasted August 6, 2022 Upon Further Review Gold Bottom Call Stands August 5, 2022 Treasury Confirms Supply Tsunami We Expected – Will Obliterate Everything August 3, 2022 Withholding Tax Collections Solid in July, But Here’s Why the Party is Over August 2, 2022 The Bond Rally That Fooled The Majority And Didn’t Help Dealers July 27, 2022 As Good As it Gets, Before the End of Time July 18, 2022 Are the Fed and Treasury Geniuses, or Just Lucky? Part One July 12, 2022 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.
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