Archive for the ‘Lee’s Free Thinking’ Category

Watch Out Bears! Fed POMO Is Back!

Courtesy of Lee Adler

That’s right. The Fed is doing POMO again.  POMO means Permanent Open Market Operations. It’s a fancy way of saying that the Fed is buying Treasuries, pumping money into the financial markets.

Over the past 6 days, the Fed has bought $8.6 billion in T-bills and coupons. These are the first regular Fed POMO Treasury operations since the Fed ended outright QE in 2014.

Who is the Fed buying those Treasuries from?

The Primary Dealers. Who are the Primary Dealers?  I’ll let the New York Fed tell you:

Primary dealers are trading counterparties of the New York Fed in its implementation of monetary policy. They are also expected to make markets for the New York Fed on behalf of its official accountholders as needed, and to bid on a pro-rata basis in all Treasury auctions at reasonably competitive prices.

The Fed is Doing POMO, Injecting Cash Into Primary Dealer Accounts

When the Fed buys Treasuries from the Primary Dealers, the Fed pays them by depositing money in the dealers’s accounts at the Fed. When the dealers get cash from the Fed, you know what they do with it! They do their business. They deal. They use the cash to accumulate inventory, whether Treasuries, stocks, or whatever else they make markets in.

The dealers have had a big problem lately. They’ve been forced to accumulate unusually large inventories of Treasuries, particularly this month. That’s because the Trump Regime and the rump Congress agreed to lift the debt ceiling that had been in force since March.

The Treasury market is under assault, being deluged with new supply. Amazingly, the Treasury market hasn’t buckled. It has had the benefit of a worldwide capital flight into Treasuries as foreign economies and markets weaken. Negative interest rates have also helped drive European capital into Treasuries.

Until early August the Treasury market also had the benefit of hundreds of billions in T-bill paydowns flooding dealer and investor accounts with cash. That game ended when the debt ceiling was lifted a few days ago. The Treasury market no longer has that tailwind. Now, a massive flow of new supply creates an equally large…
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The Treasury Supply Drumbeat Has Begun

Courtesy of Lee Adler

The beat goes on. The US Treasury announced a 30 year TIPS issue today, bringing net new Treasury supply for the month so far to $119 billion. 

Here are the details:

Term and Type: 29-Year 6-Month TIPS

Reopening: Yes

Offering Amount: 7 Billion

Announcement Date: 08/15/2019

Auction Date: 08/22/2019

Issue Date: 08/30/2019

Maturity Date: 02/15/2049

PDF | XML

Supply will pound the financial markets to a pulp as far as the eye can see. Those who are currently panicking to buy Treasuries at these levels near all time lows in yield, are picking up nickels in front of steam rollers.

I’ve been warning Liquidity Trader subscribers for months that the problems would start when the debt ceiling was lifted.

Know what’s coming and what to to about it! Read Lee Adler’s Liquidity Trader risk free for 90 days! Satisfaction guaranteed or your money back.

90 day risk free trial offer is for first time subscribers only.

The post The Treasury Supply Drumbeat Has Begun was originally published at The Wall Street Examiner. Follow the money!





Long Term Stock Market Chart Perspective

Courtesy of Lee Adler

After a big day like yesterday, I like to get a little long term stock market chart perspective. (Yes, this stilted verbiage is for search engine optimization ????).

We do that with a monthly bar chart, which I update when relevant in Lee Adler’s Technical Trader. That’s in addition to the regular daily bar/cycle charts covering the past year, and a weekly cycle chart covering the past 4 years.

I wrote on July 14, in reference to the price and indicator patterns on the weekly chart:

The market has overshot a 3-4 year cycle projection in terms of both price and time. There are no long term projections. A 4 year cycle high is ideally due now. A 4 year cycle low is ideally due in mid 2020. That suggests a short, sharp bear market starting in the next few months and lasting until the second or third quarter of next year.

Prior to that, back on June 23, I wrote:

The market is now in a drive toward the top of the megaphone or broadening top pattern that has been forming since December 2017. That line is now at 3020. A sharp reversal from there would suggest that a major top formation is still in play.

That was my perspective in late June and mid July. Here we are some 4-7 weeks later. Did yesterday’s 85 point plunge in the S&P 500 mean anything in the big picture? Or was it just another case of racing easily across a thinned out trading range. Sound and fury signifying nothing?

Here’s that monthly bar chart that includes yesterday’s action. I’ll let you decide.

Long Term Stock Market Chart

Now, bear in mind that August isn’t over yet. It’s not where the S&P 500 is during the month that counts, it’s where we are on August 31, that matters. If the market fails to recover back above 2950, then the bears have it.

So from a long term stock market chart perspective (there’s that SEO keyword nonsense again), 2950 looks like the key this month. If we’re below that at the close on Friday, August 30, then the target would appear…
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Lee Tells Lindsay Williams – The Third Time’s The Charm To End The Bull

Courtesy of Lee Adler

Is it the end of a Bull Market? The S&P500 fell around 90 points. A precursor to something or is it just a moment in time?

Hear more of Lindsay Williams and guests at Strictly Business Podcast.

Correction: During the interview I said that the debt ceiling deal was awaiting Commisar Trump’s signature. He had already signed it last week. Issuance of new Treasury supply has already begun.

 

The post Lee Tells Lindsay Williams – The Third Time’s The Charm To End The Bull was originally published at The Wall Street Examiner. Follow the money!





Today’s Stock Market Chart Pattern and Outlook – The Shadow Knows

Courtesy of Lee Adler

Here’s today’s mid-day stock market chart outlook for the rest of the day.

This morning’s pullback stopped at 2908, where minor support was indicated on my intraday cycle chart.

Today's Stock Market Chart Pattern

If this little stutter step was the midpoint of the move, then we’re looking at 2892 as the target.

Note: This is an if-then statement. In  other words, I have no fucking clue where this move is going. At least at the moment, until the market gives us another signal.

Try Lee Adler’s Technical Trader risk free for 90 days! Follow the money. Find the profits!

The target could be 2900-2898 where minor support line s project currently. Or this could be it.  Or 2850. Or 2830. Remember, they usually go down faster than they go up.  

Today's Stock Market Support and Resisstance Levels

2919 is minor resistance. If cleared, look for 2929. If they fail to clear, put on your crash helmet.

If it gets there, I would guess that the PPT and the Fed will attempt to defend 2900.  Whether they’re able to do so successfully is the question.

The post Today’s Stock Market Chart Pattern and Outlook – The Shadow Knows was originally published at The Wall Street Examiner. Follow the money!





Treasury Offering Net Supply Bulges – The Deluge Begins

Courtesy of Lee Adler

The bulge in Treasury offering net supply issuance in the wake of the suspension of the debt ceiling, is starting.

Let the deluge begin.

Treasury Offering Net Supply

The US Treasury today announced $90 billion in 4 and 8 week bills to be auctioned Thursday. That includes $20 billion in net new supply to start raising the cash they need to repay the accounts they raided under the debt ceiling.

Commissar Trump signed the Rump Congressional deal to suspend the debt limit last week. Hundreds of billions in Treasury offering net new supply are coming within weeks. While that will eventually moderate some, the supply deluge will stretch as far as the mind can see, and beyond.

The new bills announced today settle August 13. Then $26 billion in net new coupon debt will settle August 15.

The pressure of new Treasury supply on the market will be relentless. We have known ever since the debt ceiling was imposed in March that this day would come and that it would be bad news for the stock market.

I analyze this trend 7 times monthly in Lee Adler’s Liquidity Trader. Start your 90 day risk free trial today!

The post Treasury Offering Net Supply Bulges – The Deluge Begins was originally published at The Wall Street Examiner. Follow the money!





A Scary Stock Market Chart Prediction

Courtesy of Lee Adler.

Here’s an ugly stock market chart prediction you might want to consider in planning your trading and investments.

This monthly chart makes the current action look like something from a horror movie, The Death of the Zombie Bull, bringing horror and destruction to millions of investors.

Or maybe not. I’ll just show you the chart and let you decide. Scary Stock Market Chart Prediction

I have pointed out the long term trendline above 3020-30 several times in recent months. As August begins we’re looking at the potential for the third rejection from that line. Let’s see where we are in a few weeks.

Meanwhile, long term momentum, at the bottom of the chart, is on a sell signal. It’s also on the verge of breaking a trendline from the 2009 low. Sure these might be false warnings. They been before.

But when viewed in terms of the age of this cycle, and the breaks of the long term price trends, do you want to bet that these are false signals?

I sure don’t.

I cover the daily and weekly charts with short term, intermediate, and long term price projections, and suggested short term SPY option trades in my Technical Trader reports. I’ve been following and reporting this inflection point for the past several weeks as it unfolds. Is this the end of an era, or just a fulcrum? We’ll know soon.

Try Lee Adler’s Technical Trader risk free for 90 days! This offer applies to first time subscribers only.

The post A Scary Stock Market Chart Prediction was originally published at The Wall Street Examiner. Follow the money!





 
 
 

Phil's Favorites

Students who plan to seek more education than needed for their career earn more money

 

Students who plan to seek more education than needed for their career earn more money

Extra education has been shown to pay off in the long run. John O'Boyle/Flickr

Courtesy of Soobin Kim, Michigan State University

...



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Zero Hedge

Bonds & Bullion Bid As Fading Stimulus Hype Sinks Stocks, Dollar

Courtesy of ZeroHedge View original post here.

up. down. good. bad. "best economy ever". "recession imminent". record highs. record lows.

Chinese stocks were broadly flat overnight but tech-heavy ChiNext was weaker...

Source: Bloomberg

European stocks were all weaker today, accelerating lower after the Italian political chaos...

Source:...



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Lee's Free Thinking

Watch Out Bears! Fed POMO Is Back!

Courtesy of Lee Adler

That’s right. The Fed is doing POMO again.  POMO means Permanent Open Market Operations. It’s a fancy way of saying that the Fed is buying Treasuries, pumping money into the financial markets.

Over the past 6 days, the Fed has bought $8.6 billion in T-bills and coupons. These are the first regular Fed POMO Treasury operations since the Fed ended outright QE in 2014.

Who is the Fed buying those Treasuries from?

The Primary Dealers. Who are the Primary Dealers?  I’ll let the New York Fed tell you:

Primary dealers are trading counterparties of the New York Fed in its implementation of monetary policy. They are also expected to make markets for the New York Fed on behalf of its official accountholders as needed, and to bid on a pro-rata ba...



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Kimble Charting Solutions

Steel About To Breakdown And Send Bearish Economic Message?

Courtesy of Chris Kimble

Is the Steel Industry suggesting that a recession is nearing? In my humble opinion, the jury is still out on this one.

This chart from Marketsmith.com takes a look at the patterns of Steel ETF (SLX).

SLX has spent the majority of the past 3-years inside of trading range (1). The persistent decline over the past year has it testing the bottom of this trading range at (2).

The weakness over the past year has it below long-term moving averages as its relative strength r...



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Insider Scoop

Economic Data Scheduled For Tuesday

Courtesy of Benzinga

  • The Johnson Redbook Retail Sales Index for the latest week is schedule for release at 8:55 a.m. ET.
  • San Francisco Federal Reserve Bank President Mary Daly is set to speak at 4:30 p.m. ET.
  • Federal Reserve Board of Governors Vice Chairman for Supervision Randal Quarles will speak in Salt Lake City, Utah at 6:00 p.m. ET.

Posted-In: Economic DataNews Economics ...



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The Technical Traders

The Next Breakdown And The Setup

Courtesy of Technical Traders

If you’ve been following our research long enough, you’ll remember that we often discuss Fibonacci Price Theory and how we use it to try to identify opportunities and trends in the markets.  The basic premise of Fibonacci Price Theory is that price is always seeking to establish newer highs or newer lows with every rotation on the charts.  The theory is rather simple to understand and learn and it helps easily identify where support, resistance, and the trend is established.  Let’s take a minute to go over the basics of Fibonacci Price Theory before we continue.

This first example of Fibonacci Price Theory trend is a simple example that highlights the basic premise of the the...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

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Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

Reminder: We're is available to chat with Members, comments are found below each post.

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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