Splat 8/5/22

[DrStool]

Well, don't say I didn't warn. Withholding Tax Collections Solid in July, But Here’s Why the Party is Over

And we have a rather pointed reaction, as shown in the hourly ES, S&P 500 continuous 24 hour fuguetures. They've broken the latest iteration of the green on green on green channels, but beware. They merely need to get back to 4137 to inertiate that. Like that word? It's new. I couldn't think of the word I wanted, and that's what came out. 

And if it doesn't reverse, then the next target will be that all important sport level of 4078. Break that, and Houston, we have a problem. 

Meanwhile, the 10 year Treasury yield is strangely quiet. I don't think it will be for much longer. 

 

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

• 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
• Swing Trade Screens – We Had Longs, Yay! But… August 1, 2022
• To Blow Off, or Not to Blow Off – That Is the Question August 1, 2022
• Gold Has Made a Bottom July 28, 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

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[DrStool]

  

15 hours ago, fxfox said:

Consensus for NFP tomorrow is that it will virtually „crash“ from 372k to 250k.

If it comes in better, we will now say „then they gonna sell because of fear of tight FED“. But they could also promote the narrativ that the FED lies and won‘t be as tight as it said… Fact is, there was more liqui than we thought since June bottom. Where did it come from? No one knows. 

Not true. 

Treasury Confirms Supply Tsunami We Expected – Will Obliterate Everything 

I detailed where it came from in that report. It came from exactly where it was supposed to come from given the data we already had, and published government forecasts. Only people who ignore that data are mystified. We were not. 

 

[fxfox]

12 minutes ago, DrStool said:

  

Not true. 

Treasury Confirms Supply Tsunami We Expected – Will Obliterate Everything 

I detailed where it came from in that report. It came from exactly where it was supposed to come from given the data we already had, and published government forecasts. Only people who ignore that data are mystified. We were not. 

 

Ah ok, thank you 😎

and with that tax collection data we knew that 250k will most likely be beaten and that the economy is not in such a recessive phase most think it is right now.

[DrStool]

[DrStool]

4 minutes ago, fxfox said:

Ah ok, thank you 😎

and with that tax collection data we knew that 250k will most likely be beaten and that the economy is not in such a recessive phase most think it is right now.

Correct. The real data has never supported the recession calls, with the exception of the dip in May. 

[DrStool]

June was a blockbuster, and July solid. 

Withholding Tax Collections Solid in July, But Here’s Why the Party is Over

[DrStool]

Note that June NFP had a big upward revision too. Eventually, the BLS guess catches up as they adjust to reality. 

 

Liquidity Trader- Money Trends

How Fed and Treasury policy, Primary Dealers, real time Federal tax collections, foreign central banks, US banking system, and other factors that affect market liquidity, interact to drive the financial markets. Focus on trend direction of US bonds and stocks. Resulting market strategy and tactical ideas. 4-5 in depth reports each month. Click here to subscribe. 90 day risk free trial!

[DrStool]

They also build catch up adjustments into the new data, because they don't want to make the revisions too large. It makes them look bad. Instead they put the revision into the new number to make the Street look bad. 

Withholding Tax Collections Solid in July, But Here’s Why the Party is Over

[DrStool]

They (BLS) may be dumb, but they're not stupid. 

 Liquidity Trader- Money Trends

How Fed and Treasury policy, Primary Dealers, real time Federal tax collections, foreign central banks, US banking system, and other factors that affect market liquidity, interact to drive the financial markets. Focus on trend direction of US bonds and stocks. Resulting market strategy and tactical ideas. 4-5 in depth reports each month. Click here to subscribe. 90 day risk free trial!

[DrStool]

27 minutes ago, fxfox said:

Ah ok, thank you 😎

and with that tax collection data we knew that 250k will most likely be beaten and that the economy is not in such a recessive phase most think it is right now.

Actually, it's easy to know what actual jobs growth is doing. But predicting the NFP number is hard. Because the BLS methodology is so convoluted, nobody can predict it. I think it has a lot to do with catching up with the errors in the prior months. But it's really hit or miss. 

In fact, economists estimates, are usually, but not always, closer to the facts. The BLS is making it up as it goes. The birth death adjustment in particular, is nonsense. And the X-13 Arima seasonal manipulation is an absolute joke. 

 

 Liquidity Trader- Money Trends

How Fed and Treasury policy, Primary Dealers, real time Federal tax collections, foreign central banks, US banking system, and other factors that affect market liquidity, interact to drive the financial markets. Focus on trend direction of US bonds and stocks. Resulting market strategy and tactical ideas. 4-5 in depth reports each month. Click here to subscribe. 90 day risk free trial!

[DrStool]

That Bloomberg piece the other day on the 10 year being headed for 2% absolutely nailed the bottom in yields. Almost to the minute of publication. 

Those guys are good. 

Treasury Confirms Supply Tsunami We Expected – Will Obliterate Everything

[DrStool]

Trend resistance on the 10 year is at 2.90 today. Clear that, and they'll be at 3.50 by the middle of next week. 

I'll update that today, I hope. I'm a day behind.

Treasury Confirms Supply Tsunami We Expected – Will Obliterate Everything

 

 

[DrStool]

Short covering at the open. Natcherly. 

[potatohead]

30 minutes ago, DrStool said:

Actually, it's easy to know what actual jobs growth is doing. But predicting the NFP number is hard. Because the BLS methodology is so convoluted, nobody can predict it. I think it has a lot to do with catching up with the errors in the prior months. But it's really hit or miss. 

In fact, economists estimates, are usually, but not always, closer to the facts. The BLS is making it up as it goes. The birth death adjustment in particular, is nonsense. And the X-13 Arima seasonal manipulation is an absolute joke. 

 

 Liquidity Trader- Money Trends

How Fed and Treasury policy, Primary Dealers, real time Federal tax collections, foreign central banks, US banking system, and other factors that affect market liquidity, interact to drive the financial markets. Focus on trend direction of US bonds and stocks. Resulting market strategy and tactical ideas. 4-5 in depth reports each month. Click here to subscribe. 90 day risk free trial!

• Originated in World War II. When something was "good enough for Government work" it meant it could pass the most rigorous of standards. Over the years it took on an ironic meaning that is now the primary sense, referring to poorly executed work.

  From Wiktionary

[fxfox]