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Is That All There Is? 3/6/24

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If that was the extent of the correction, buckle up. A new 5 day cycle up phase is under way. We might see an interim 3 day cycle high on Thursday, but the next 5 day cycle high would be due ideally until Monday. So count on today being an upsy-daisy. 

It's too soon to project even a 2-3 day cycle high. On a 1 day basis, the target is 5125. We're well on the way to that here in the premarket. There might be some resistance at 5110, but if they get through that, I'd look for 5149 PDQ. How Stocks Can Forestall the Inevitable


Meanwhile, they got a rally going in the bond market. Looking at a short term target of 4.05 in the 10 year.  The Magic of Rising Stock Prices Driving Liquidity, Driving Prices


See also Tax Collections Took Off in a Stunning Reversal in February

How about that Beerish Engorging Candle in BTC yesterday! I'm not impressed. Talk to me when it breaks 58k. 


I got a gold update in the works. Looking good. Here's the previous update on that. High base breakout and short term cycle projection both point to 2200 PDQ. 


For moron the markets, see:

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Cycles have gotten in gear to the upside, with most projections pointing to the xxxxxxxx area. The conventional measured move target of the base breakout is also around xxxx. Our mining picks are swinging up. Non-subscribers click here for access.

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"Federal tax withholding–the amount of income and payroll taxes withheld from workers’ paychecks and remitted daily to the U.S. Treasury Department–rebounded in February after a one-month dip (see the chart below). Specifically, we estimate that withholding grew by 6.0 percent in February (compared to the amount from February 2023), in line with the amount recorded from May to December 2023, when it grew by between 5 percent and 7 percent each month (again, comparing the amounts of withholding to those from the same month in the prior year). Growth temporarily declined to 2.3 percent growth in January 2024; withholding in January is hard to interpret because it is affected by year-end bonuses and two holidays. It appears that the withholding dip in January was temporary. Those growth figures all adjust the amount of withholding to standardize the makeup of business days across months (which can affect the reported amounts significantly) and to remove the estimated effects of tax law changes (with no adjustments currently needed).  Withholding moves with economywide wages and salaries (again, see the chart below). Thus, the February withholding data suggest that overall wages are continuing to grow at a significant pace"




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While we're on the subject. 

Withholding tax collections soared in February to their highest level in 13 months. If this is not just a flash in the pan or data anomaly, it could mean smaller than forecast deficits ahead. Smaller deficits translate to less than expected Treasury supply. But less than expected isn’t less in real terms. Supply will still be huge, and still a problem for the market to digest over the longer term. Non-subscribers, click here for access.

Subscribers, click here to download the report.

But in the short run, the strongest revenue collection period of the year starts now. Corporate income taxes for last year are due on March 15, and both annual individual and quarterly individual and corporate income taxes are due April 15. Which is why, every year from mid March to late May, the annual revenue windfall leads to paydowns of Treasury bills. Non-subscribers, click here for access. 

Those paydowns put cash back into the pockets of the holders of the paid down T-bills. That cash figruratively burns holes in the pockets of those entities, mostly professional investors, who then use that cash to buy longer term fixed income paper and yes, stocks. That’s why we normally see a seasonal rally in the stock or bond market, or both, in the spring. The timing varies, but significant strength in April and May is the rule. Non-subscribers, click here for access. 

When the paydowns end and the government starts borrowing heavily again, the markets often sell off.  Non-subscribers, click here for access. 

So should we expect anything different this year?  Here’s the answer, and an explanation of why that is, and how to take advantage of it.  Non-subscribers, click here for access. 

Liquidity analysis gives us the context, or the map of the general direction where we can expect the markets to head over the next few months. That helps us to better understand the message of the technical charts.  Non-subscribers, click here for access. 

Meanwhile, the Fed’s RRP facility, which has been the source of much of the money contributing to the stock and bond market rallies, continues to be drained. However, the rate of withdrawals has slowed dramatically. As a result, the money in that pot looks likely to last longer than I originally expected, especially if T-bill paydowns increase on the strength of greater than expected revenues. This report also shows you exactly what that means for the markets.  Non-subscribers, click here for access. 

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1 hour ago, SiP said:

What a pump on bitcoin. This market just can't drop.

Seems related to the ETF approvals. 

It's stunning, really. 

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Market could rise for eg 700 weeks and than drop within 24weeks or last eg 60 weeks.


It's almost always better to play the long side. It's hard to pick the right timing for the short side.

High level of special fund, higher taxes and good liquidity means we actually could be in this bull run till at least h2 an maybe even q3

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