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Can't Keep a Good Market Down 3/12/24

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Higher lows and higher hize, gize. 

But keep an eye on 5130 as of 8 AM in NY. That looks to be trend spport. If it breaks they could settle into a range with the next spport line around 5105 turday. 

But if 5130 holds this morning, the next target would be 5150, and if they clear that, then 5170 today. The moon, Tamara. Market Flies Blind in Thin Air 


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Inflation is bullish.

Disinflation is bullish.

Deflation is bullish. 

Flation in bullish. 

If somebody farts, buy!

That is all. 

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"Fed pivot or not, liquidity is on the rise again.  Overall liquidity, as defined by the Fed’s balance sheet, less reverse repos (RRP) less the Treasury’s cash balance at the Fed (TGA), has been rising since mid-2023, taking stocks with it."

- Jurrien Timmer


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That is not "overall" liquidity. 

RRPs are quintessentially liquidity. They've been funding the rally. Sure, deduct the Treasury cash balance. But what happens when it gets spent. It's deferred liquidity. 

It's also current liquidity. Treasury issuance is money. It can be instantly flipped into a repo at 97 cents to the dollar. The increase in the Treasury balance over the past year was driven by issuance of Treasuries. 

The rest of the Fed's balance sheet (aka its assets) has not been growing.  So there's something very wrong with that chart. I have no idea what he did there. 

Of course, total liquidity and stock prices correlate, but which came first the chicken or the egg. With the Fed steadily shrinking its balance sheet it should be clear to everyone that rising asset prices create their own liquidity. 

I got a report coming in an hour or two that will make clear how that works. Stay tuned.


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The Fed’s weekly real time balance sheet data and its slightly lagged data on the condition of the US banking system are inching closer to suggesting an end to the stock market rally. But they aren’t there yet. It could still take weeks or months.

It’s better not to attempt to anticipate. Money talks, and markets listen. Non-subscribers, click here for access.

Subscribers, click here to download the report.

Markets also have the ability to create their own money. And that’s what’s been happening in this bull run. The Fed and its cohorts are not the drivers of this, as they were under the 12 year QE regime. Non-subscribers, click here for access.

As animal spirits take hold, eventually they turn into manias. And manias create their own liquidity through the magic of leveraged borrowing. As prices of stocks rise, a cycle of rising prices creates more collateral for borrowing, leading to higher prices, and so on.  Non-subscribers, click here for access.

Of course, manias ultimately lead to crashes. But they continue until they are exhausted. We look for signs of exhaustion both in the technical market data, which I report in the Technical Trader reports, and in the liquidity data that I report here. In this report, I show you exactly what the charts of the data are telling us to expect in the weeks and months ahead. If you know what’s coming, then you can formulate your own strategy and tactics accordingly. Non-subscribers, click here for access.

As I wrote last week, “The end may come quickly, so we need to be prepared and vigilant. Complacency is the trader’s enemy. We must guard against that…” Non-subscribers, click here for access.

Get the report now, for specifics.  Non-subscribers, click here for access.

KNOW WHAT’S HAPPENING NOW, before the Street does, read Lee Adler’s Liquidity Trader risk free for 90 days! Act on real-time reality! 

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