DrStool Posted March 10, 2023 Report Share Posted March 10, 2023 After reviewing the withholding tax data for February last week, I decided that the jobs report should be faded. That left a lot to conjecture because there were no economists' estimates posted yet. Now they are. The consensus expectation is for a headline number of +225,000. That's less than half the reported gain for January. So the priests of economism are apparently paying attention to something other than BLS nonsense. So they reduced expectations, but maybe not enough. As I wrote in that report, "Revenues were weak. The jobs number should be weak. But fade any rally on that, both stocks and bonds, because xxxx xxxxxxx xxxxxxxx xxxxx xxxxxxxxxx xxx xxxxx. So, now we get to see if things unfold that way. Meanwhile, yesterday, meltdowns in bank stocks send the stock market careening lower yesterday. I have been warning about hidden losses at the banks for many months. Quote Regardless of that, we had seen from the banks’ weekly data on their fixed income holdings that some of them were sitting on hidden losses in their not-marked-to-market long term portfolios. I forecast that we would soon start to see some of them in trouble as they were forced into liquidation mode. So far, only CreditSweets (CS) has floated to the surface, but there are surely other bloated bodies about to be revealed, as the current round of falling bond prices persists. Non subscribers, click here to read this report. So none of this is a surprise, but the market acted surprised yesterday because investors let Wall Street lead them around by the nose. The barkers on CNBC are the border collies working for Street overlords. The institutional clowns who watch that crap are the sheep, while the public stands bewildered, just handing their money over to these clueless venal, clowns. Without the Fed on their side, as it was from 2009 to 2021, they stand no chance. Meanwhile, the Powers that Be, including perhaps Janet Yellen's PPT, find ways to keep the bottom from dropping out, lest there be too much panic for the system to handle. They can do that for awhile, but not indefinitely. Judgment Day is coming. Maybe not today. The market, represented by the ES, S&P 500 24 hour futures chart, looks Dover Sole on most hourly chart time frames, and 3890-95 is a VISP: A very important sport level. The latest 5 day cycle projection of 3885 was hit. On the other hand, crashes start from apparently Dover Sole lows. If this sport level gives way, an 80 point drop could happen in a heart beat. On the other other hand, nothing lasting will happen on the upside unless they clear 3940 this morning. The 10 year Treasury yield broke down yesterday on a risk off move. Total BS. It can't last, but the measured move implication of the breakdown is in the 3.60-.65 range. A 4 week cycle projection of 3.83 was already hit yesterday. These reports clearly show, week in and week out, why any rallies in the bond market are doomed. Gold is back in the middle of its 2 week trading range, likely headed back to the top of the range where important decisions will be made. And that is likely an understatement. For moron the markets, see: Gold On Cusp of Brutal Outlook if This Happens March 8, 2023 Swing Trade Screen Picks – 3 Buys, No Shorts March 6, 2023 Mixed Bag of Signals Screaming, “Walk This Way” March 5, 2023 February Withholding Taxes Say – Fade the Jobs Report! March 2, 2023 Here’s Why There Will Never Be Bull Markets Until This One Thing Happens February 26, 2023 You Can Now Follow the Diabolical Usual Suspects February 16, 2023 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 folder. Link to comment Share on other sites More sharing options...
DrStool Posted March 10, 2023 Author Report Share Posted March 10, 2023 Please don't post in old threads. It gets things all out of order. Link to comment Share on other sites More sharing options...
Jorma Posted March 10, 2023 Report Share Posted March 10, 2023 When clicking on this link at 10:30AM EST, todays thread is not shown. https://www.capitalstool.com/forums/index.php?/forum/3-the-daily-stool-stock-market-message-board/ As I was saying, StinkyCoin is looking pretty stinky. Link to comment Share on other sites More sharing options...
Jorma Posted March 10, 2023 Report Share Posted March 10, 2023 Haha. At 10:35 todays thread showed. Link to comment Share on other sites More sharing options...
fxfox Posted March 10, 2023 Report Share Posted March 10, 2023 Don‘t praise the Lord before sunset. Link to comment Share on other sites More sharing options...
BreakOut Posted March 10, 2023 Report Share Posted March 10, 2023 Mea culpa. Some interesting stuff was being posted in the “pre-market”. Link to comment Share on other sites More sharing options...
fxfox Posted March 10, 2023 Report Share Posted March 10, 2023 That SVB thing yest was a classic bank run. Don’t forget that. Therefore the PPT will be quite active today. Link to comment Share on other sites More sharing options...
DrStool Posted March 10, 2023 Author Report Share Posted March 10, 2023 4 hours ago, DrStool said: The jobs number should be weak. But fade any rally on that, both stocks and bonds The ES hit a high of 3936.6 at 8:31 AM. Link to comment Share on other sites More sharing options...
DrStool Posted March 10, 2023 Author Report Share Posted March 10, 2023 49 minutes ago, Jorma said: When clicking on this link at 10:30AM EST, todays thread is not shown. https://www.capitalstool.com/forums/index.php?/forum/3-the-daily-stool-stock-market-message-board/ As I was saying, StinkyCoin is looking pretty stinky. Because there were 3 posts above it as people seemed to be randomly posting in older threads. I will be more proactive in locking them immediately when the new day is open. Mea culpa. Link to comment Share on other sites More sharing options...
SiP Posted March 10, 2023 Report Share Posted March 10, 2023 "This chart is out of context and it misses a major point. Bank Treasuries buy bonds as liquid assets for their balance sheet, but they hedge most if not all interest rate risk using swaps. Here you see losses in bonds. You are missing the offsetting gains in swaps." Link to comment Share on other sites More sharing options...
DrStool Posted March 10, 2023 Author Report Share Posted March 10, 2023 Hourly oscillators are on the buy side with a minor positive divergence at the low. Link to comment Share on other sites More sharing options...
DrStool Posted March 10, 2023 Author Report Share Posted March 10, 2023 1 minute ago, SiP said: "This chart is out of context and it misses a major point. Bank Treasuries buy bonds as liquid assets for their balance sheet, but they hedge most if not all interest rate risk using swaps. Here you see losses in bonds. You are missing the offsetting gains in swaps." It's not a perfect hedge. Most of these were purchased with repo. There's high leverage. There are definitely losses. The question is, how big. Some banks are probably well positioned, but if even a few are not, it's a problem. [Note: intentional understatement] Link to comment Share on other sites More sharing options...
WTF Posted March 10, 2023 Report Share Posted March 10, 2023 Nothing builds confidence in the markets like a good old fashioned bank run. Next up, bread lines... Never been a better time to get into an overpriced equity market. We haven't even started to correct to the downside yet... at some point the SWHTF!!! Link to comment Share on other sites More sharing options...
SiP Posted March 10, 2023 Report Share Posted March 10, 2023 Im very curious how Credit Suisse story will develop over time. Link to comment Share on other sites More sharing options...
WTF Posted March 10, 2023 Report Share Posted March 10, 2023 6 minutes ago, SiP said: "This chart is out of context and it misses a major point. Bank Treasuries buy bonds as liquid assets for their balance sheet, but they hedge most if not all interest rate risk using swaps. Here you see losses in bonds. You are missing the offsetting gains in swaps." The losses don't magically disappear, they are real somewhere. Just like in 2008 it's all about counterparty risk. Can the entity on the other side of the trade actually make good on the deal? You can make a lot of money for a while taking the other side of a trade you are never going to pay off on. AIG ring a bell? Link to comment Share on other sites More sharing options...
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