DrStool Posted December 9, 2022 Report Share Posted December 9, 2022 Any way you slice it, coming into the NY open this morning, 3978 is the number to watch. It's the apex of apexes. And the direction it takes from there is likely to define the rest of the day, if not more. Of course, there's always the opportunity to honor the memory of the late, great Dick Trickle. For hopeful bears, I would add that they need to take out 3966 to get anything going on the downside. Meanwhile, the T-bill market is telling us that there's excess liquidity this week. Where's it coming from? Not the Fed's Reverse Repo slush fund. It's growing again. And of course, the Fed is sucking cash out of the system week by week. By process of elimination we can only gather that it's coming from borrowing. Margin and repo. Leverage on leverage. Of course, some cash came from the liquidation of stocks earlier this week. That started to be redeployed yesterday as bull hope springs infernal. It won't end well, but it can go on until it reaches exhaustion. We'll depend on the charts to tell us when that is. For moron the markets, see: Gold Hones In On New High Projections December 9, 2022 Federal Tax Revenues Are Slowing December 6, 2022 Swing Trade Screen Picks – Picks are Balanced this Week December 5, 2022 Bears Last Custard Stand December 4, 2022 Bears Beware, Money Managers Are Finally Spending their RRP Slush Fund November 30,2022 Swing Trade Screen Picks – Read My Lips, No New Longs (A Few More Shorts) November 28, 2022 Major Inflection Point Here to Determine Whether Bull or Bear November 28, 2022 Fed Policy Will Stay Bearish Until It’s Too Late November 20, 2022 The Repeal of Rule Number One, Don’t Fight the Fed November 14, 2022 Bond Market Rally is Technically Valid but Belies the Facts November 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. Link to comment Share on other sites More sharing options...
Jorma Posted December 9, 2022 Report Share Posted December 9, 2022 A preference for US assets can be an explanation for the liquidity bump. There is the story about Chinese money getting out of China because of the real estate carnage or European money seeing the US as safer. It seems like the Fed is losing control of rates, to the downside. Link to comment Share on other sites More sharing options...
fxfox Posted December 9, 2022 Report Share Posted December 9, 2022 PPI bomb Link to comment Share on other sites More sharing options...
SiP Posted December 9, 2022 Report Share Posted December 9, 2022 negative PPI print Headline: +7,4% (est +7,2%) Core: +6,2% (est +5,9%) after couple months of lower prints (below est). Link to comment Share on other sites More sharing options...
DrStool Posted December 9, 2022 Author Report Share Posted December 9, 2022 Amazing. Link to comment Share on other sites More sharing options...
SiP Posted December 9, 2022 Report Share Posted December 9, 2022 57 minutes ago, Jorma said: A preference for US assets can be an explanation for the liquidity bump. There is the story about Chinese money getting out of China because of the real estate carnage or European money seeing the US as safer. It seems like the Fed is losing control of rates, to the downside. Not only China. From Poland perspective I could tell you that for the last couple years US was promoted as a best bet especially when PLN is losing steam and polish stock exchange (GPW, and WIG20 blue chip indices) is used by government to give free money (so kick in the ass stockholders). In other words - money was flowing out of Poland. Due, among other things, to the war (although this started earlier), there is a record number of currencies (USD, EUR) in the accounts of Poles at banks - currently it is probably 18% (as in 2001 after crash and when intrest rate was like 15% in Poland, really. Now its below 7%). In Hungary it was 26% or maybe even 30%!!!). In other words, quite a lot of EM citizens are buying foreign currencies, including gold which is still breaking records in domestic currencies - see the XAUPLN chart. And what you could do with dollar? Of course buy bonds or equities. so US is the last shoe to drop - if it will drop. Link to comment Share on other sites More sharing options...
DrStool Posted December 9, 2022 Author Report Share Posted December 9, 2022 Flation update. PPI final demand core finished consumer goods still running hot after rebound last month. Just a pause in the year to year disinflation But the monthly change looks big. So the market overreacts. Link to comment Share on other sites More sharing options...
SiP Posted December 9, 2022 Report Share Posted December 9, 2022 And they are back Link to comment Share on other sites More sharing options...
fxfox Posted December 9, 2022 Report Share Posted December 9, 2022 The whole downmove since Jan 22 looks like orchestered. Guess Goldman and 3-4 others manage it on behalf of the FED. Link to comment Share on other sites More sharing options...
DrStool Posted December 9, 2022 Author Report Share Posted December 9, 2022 The theory that the money is coming from Europe doesn't hold up to the fact that the EUR/USD has been rallying like mad since late October, coincident with the bond market rally. If there were material outflows of euros to dollars, that would send the eur/usd lower. But the flows have been going the other way for the last 6 weeks. For a couple of years before that, yes, there were definitely outflows, but it reversed as the ECB got more hawkish and European interest rates have risen lately. I agree about Poland, but it's too small to matter. Its bank deposits are a fraction of those in W. European countries. Link to comment Share on other sites More sharing options...
DrStool Posted December 9, 2022 Author Report Share Posted December 9, 2022 Looks like the bottom is in on the 10 year yield. Bond rally finito. https://liquiditytrader.com/index.php/2022/12/06/federal-tax-revenues-are-slowing/ Link to comment Share on other sites More sharing options...
BurntOnce Posted December 9, 2022 Report Share Posted December 9, 2022 silver making a comeback. that may signal near peak interest rates. or a safe haven as we go extinct. Link to comment Share on other sites More sharing options...
BurntOnce Posted December 9, 2022 Report Share Posted December 9, 2022 speaking of poland, did you get a whiff of this? "We should be burning everything, other than tires, or similar things, because this is unfortunately what happens here," he said. "Simply, Poland needs to be heated." https://www.reuters.com/world/europe/burn-everything-poland-chokes-smog-war-2022-12-08/ Link to comment Share on other sites More sharing options...
DrStool Posted December 9, 2022 Author Report Share Posted December 9, 2022 2 minutes ago, BurntOnce said: speaking of poland, did you get a whiff of this? "We should be burning everything, other than tires, or similar things, because this is unfortunately what happens here," he said. "Simply, Poland needs to be heated." https://www.reuters.com/world/europe/burn-everything-poland-chokes-smog-war-2022-12-08/ There were days in Warsaw when I had a sore throat from the air. Link to comment Share on other sites More sharing options...
DrStool Posted December 9, 2022 Author Report Share Posted December 9, 2022 Great post by Chris Whalen Blockchain, Crypto & Falling Liquidity Link to comment Share on other sites More sharing options...
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