Posts Tagged ‘POMO’

Enjoying Coffee in the Lodge with Jesse

THE BANKS MUST BE RESTRAINED, AND THE FINANCIAL SYSTEM REFORMED, WITH BALANCE RESTORED TO THE ECONOMY, BEFORE THERE CAN BE ANY SUSTAINED RECOVERY – Jesse 

Enjoying Coffee at the Lodge with Jesse 

By Ilene

coffee at the lodge with JesseI have long been a fan of Jesse’s Café Américain. Jesse is a brilliant writer and a deep thinker who uniquely transcends politics, easily seeing through lies and disinformation. He has a great feel for what really matters, and the courage to speak out about it.  Jesse and I have spoken before about the economy, markets and politics, and being at a crossroads once again, it was a perfect time to catch up. 

****

Ilene: Hi Jesse, since our last interview, I would guess that we’d both agree that nothing has been done to clean up the financial system – the banks and government interconnectedness, conflicts of interest, and out-and-out fraudulent activities.  Are things better or worse, or in line, with what you were expecting over a year ago?

Jesse: I think things are progressing in line with what I had expected, with the Fed and the government trying to prop up an unsustainable status quo by monetizing debt.  I am still a little shocked by the brazen manner in which the financial markets are being conducted and regulated, and the news is reported in the US. It is one thing to hold a theory that says something will happen, but it is quite another to see it actually happening, and so blatantly, almost without a word of protest.

Ilene: How do you view our financial system and the global financial system now, with no progress towards any kind of reform?

Jesse: The US is now being run by an oligarchy, with lip service being paid to the electorate in allowing the people to vote for the candidates that the parties and the powers will put forward.  There will be no recovery for the middle class until they assert themselves. I know I have stated this often in my tag phrase, “The banks must be restrained…” But it is the case.

There are areas of resistance to this trend on what one might call ‘the fringes of Empire,’ those client states which have been ruled by powerful cliques with the support and the protection of the US.  Although certainly not a great analogy, it does remind one of…
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Technical Thursday – The Needle and the Damage Done

 

 

I've seen the needle
and the damage done
A little part of it in everyone
But every junkie's
like a settin' sun
. - Neil Young

Come on Bennie, give us another hit!

We're hurting man, we need the good stuff.  The markets love to get high and, just when we thought the trip was never going to end – we crash hard!  Big Ben and his Central Banking buddies fed our commodity addiction with a flow of easy money and the speculators got so hooked that they have now overdosed and the price of commodities is now killing the host (the Global Economy).  

Gee, who could have ever seen that coming?    

Oh yeah, right, it was me.  Well, very good then…  I guess.  There's nothing like a good correction to make some fast money.  In yesterday's post (and Tuesday's) I mentioned our TZA and EDZ hedges and thank goodness we dumped XLE as they flew back to $78 on the oil madness (more on that later).  In yesterday morning's Alert to Members we added IWM $83 puts at $3 and they finished the day at $3.93 (up 31%) but we were done with them earlier as we flipped bullish when they pulled back to $3.75 and grabbed the IWM weekly $80 calls at 1:03 at .66 and we flipped out of those at .93 (up 40%) for a nice, quick gain.

We also lost .20 on an SSO trade, trying to catch one more bear wave that didn't come but, on the whole – Wheeeeeeeeeeeeeee!   This is the best ride EVER!!!  We love a volatile market, especially when it gooses the VIX (something we were also long on) as that gives us better and better prices for the options we sell to suckers who think they are smarter than the market.  Yes, we buy them too – but look how fast we dump them.  Options are great for momentum trading and for controlled leverage but the REAL MONEY is made BEING THE HOUSE – not the gambler and what we really love to do is SELL options, not buy them.  

When
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Fed Releases New POMO Schedule, To Monetize $112 Billion In Bonds And Prop Up Stocks On 18 Out Of 19 Trading Days

Courtesy of Tyler Durden

The New York Fed’s equity crash prevention team of Sack-Frost has just released its most recent POMO schedule. Over the next month, ending on February 9, the Fed will purchase about $112 billion in debt in 18 discrete operations. And for the first time unlike the prior two QE2 monthly schedules, there is not one dual POMO day. From the release: "Across all operations in the schedule listed below, the Desk plans to purchase approximately $112 billion. This represents $80 billion in purchases of the announced $600 billion purchase program and $32 billion in purchases associated with principal payments from agency debt and agency MBS expected to be received between mid-January and mid-February." The days when there is no POMO will be Monday, January 17 and Wednesday, January 26. All other days have a POMO operation scheduled.

POMO Schedule

 


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Merry Monday – Will Santa Deliver Dow 11,500?

 I’m still worried about Europe.  

Everyone else seems to have forgotten, including the Europeans.  The Stoxx EU 600 Index hit its highest point since September 2008 this morning as commodities continued to climb (another chance to short oil futures below the $89 line).  The Stoxx 600 is up 6.5% for the month and up 9.9% for the year.  We had talked about gold, oil and the S&P in my Weekend Post; all are up about 10% in the second half of the year as the dollar fell 3.5%.   This morning, the dollar is hugging that 80.75 line, still 10% off it’s June high.  If Europe really is "fixed" then the dollar is free to drop back to it’s lows, which could provide tremendous rally fuel for stocks and commodities.  

Moody’s warned it may lower Spain’s rating, citing "substantial funding requirements" and France is on Credit Watch and Belgium faces a rate cut at Moody’s as well while Standard and Poor’s  is reviewing its assessments of Ireland, Portugal and Greece.  The credit default swaps tied to the French bonds imply a rating of Baa1, seven steps below its actual top ranking of Aaa at Moody’s but, if it doesn’t bother the Europeans – why should it bother us?  

There is no (ZERO) logic to global markets racing back to all-time highs with the VIX running back to it’s lows as if there is not a care in the World and I don’t say that because I’m a bitter short – we had 16 bullish trade ideas last week and just 8 bearish ones as we simply threw up our hands and played the technicals in Member Chat as the Dow tested that magical 11,500 line.  Europe reads the same news we do and markets over there are up 1% this morning despite a pretty poor performance turned in by China, where the Shanghai fell 1.4% (and that was AFTER a 50% recovery into the close) and the Hang Seng fell 0.3% (also big recovery into the close) and the Nikkei fell 0.85% (small afternoon recovery) and the BSE, our global leader into November, weakly flat-lined 5% off its highs.  

We’re watching 11,500 on the Dow as well as the 1,225 line on the S&P, which is its "must hold" line that we’ve been tracking on the breakout.  Will the Dow break higher or the S&P
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Insider Selling To Buying Ratio Approaches Five Digits, Hits Record 8,280x In Week Ending November 19

Tyler Durden reports on the latest insider buying trends and finds that "Insider Selling To Buying Ratio Approaches Five Digits, Hits Record 8,280x In Week Ending November 19" – Ilene 

Courtesy of Zero Hedge

In the first full week of the latest iteration of post-QE2 POMO, which was supposed to see a dramatic ramp in stocks, the only thing we have seen is the biggest insider buying to selling imbalance since the data has been tracked. Overall, selling by S&P500 insiders was 8,279.5x times greater than buying (per Bloomberg). There were 5 insider buys for a total of $150,673, and 117 sales for a total of $1,247,500,249. There is no point to even discuss what this data point indicates.

Zero Hedge, "Insider Selling To Buying Ratio Approaches Five Digits, Hits Record 8,280x In Week Ending November 19."


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Monday Market Movement – More Monetary Madness

Get ready for a crazy week!

We have data this week, we have the Fed and we have elections and yes, we have a worthless currency that’s worth less and less every day.  This morning, China’s PMI hit 54.7 for October, up from September’s 53.8 and indicating that China’s decision to raise rates had no impact on growth.   India found this thrilling and went up 1.4% (as of midnight) but the Nikkei flatlined because China’s gains are Japan’s losses at the moment as the Dollar failed to maintain an early pop to just 81.2 and fell back more than half a point in Asian trading.  

The yen’s moves have been "excessive" recently, a Japanese government official said Monday, but he declined to comment on whether Tokyo authorities intervened in the foreign exchange market earlier in the day to knock the currency lower. Exporters remained under selling pressure, with Canon off 0.6% and Toyota Motor down 1.1%. Honda Motor lost 3.4% despite reporting solid second-quarter earnings as the automaker cut its fiscal second-half net profit outlook.  Sony shares fell 2.2% as news that the electronics giant had returned a net profit in the July-September was offset by concerns over pressure on earnings at its television division.

"The soft U.S. dollar suggests that the market is still gearing up for a sizeable QE this week," said Greg Gibbs, currency strategist at RBS in Sydney. In Seoul, the market was modestly higher but investors were cautious ahead of the Fed meeting this week. Net selling by foreigners also tempered demand. "Some investors appear concerned that the Fed’s meeting this week may not take enough quantitative easing measures to satisfy market demands," said Lee Kyoung-min at Woori Investment & Securities in Seoul.

QE2, QE2 and more QE2 – this is the basis for the global rally.  How much QE2 will be enough to satisfy a global market that is now counting on AT LEAST $1Tn to be handed out by the Fed in 2011?  It’s not just QE2, of course, the Fed continues to hand out money to Wall Street on an almost daily basis through their Permanent Open Market Operations or "POMO" and that trade has become as reliable as our "3am Trade" on the Yen as we at PSW have now begun to follow the POMO schedule (as Goldman Sachs has been advising their own clients) to give…
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The Fed and “Plunge Protection Team”: Are They Manipulating Stocks?

The Fed and "Plunge Protection Team": Are They Manipulating Stocks? 
Rumors are, the U.S. government "is propping up the stock market." 

By Elliott Wave International

You will find many intriguing Q&As at EWI’s Message Board. We offer it as a free way for our Club EWI members and subscribers to interact with EWI and the Socionomics Institute’s experts. We strive to answer every Message Board reader, and publicly post the best Q&As. 

By far, the most frequent question we’ve been asked recently is:

"What is your take on the persistent internet chatter that the Federal Reserve is holding up the stock market via QE2, POMO, etc.? How can stocks ever decline again if the Fed is in control?"

We have several active Message Board posts that touch on "market manipulation." But here is an eye-opening chart that will help shed more light on this issue.

EWI President Robert Prechter published this chart in his October 2008 Elliott Wave Theorist. Review this chart carefully. For too many investors, the crash of 2007-2009 is becoming a hazy memory. And almost no one in the mainstream financial media talks about the utter panic in the markets in September-October 2008, the worst part of the crash.

If you think back to that time, you may remember that the Federal Reserve and U.S. government took many aggressive steps to help stop the collapse. Every time they would announce a new intervention, the market would cheer. Result? Prechter’s chart gives an unequivocal answer:

Buying on Bullish News in a Bear Market

[+] CLICK TO ENLARGE

As you can see, announcements of bailouts, unlimited credit, bans on short sales, etc., were powerless against the biggest stock market collapse in 76 years. The DJIA kept sliding. It didn’t stop until March 6, 2009 — after it had slipped below 6,500.

So: Is the Fed and the "Plunge Protection Team" engaged in market manipulation? You can browse EWI’s Message Board for some answers, but one thing is clear: When stocks were crashing two years ago, few dared to suggest that the Fed was in the saddle. Bob Prechter puts it best:

"When markets go up, the Fed seems to be in control; when they go down, it seems out of control. But the control aspect is an illusion."

Get the 33-page Market Myths Exposed eBook for
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The Fed and “Plunge Protection Team”: Are They Manipulating Stocks?

The Fed and "Plunge Protection Team": Are They Manipulating Stocks? 
Rumors are, the U.S. government "is propping up the stock market." 

By Elliott Wave International

You will find many intriguing Q&As at EWI’s Message Board. We offer it as a free way for our Club EWI members and subscribers to interact with EWI and the Socionomics Institute’s experts. We strive to answer every Message Board reader, and publicly post the best Q&As. 

By far, the most frequent question we’ve been asked recently is:

"What is your take on the persistent internet chatter that the Federal Reserve is holding up the stock market via QE2, POMO, etc.? How can stocks ever decline again if the Fed is in control?"

We have several active Message Board posts that touch on "market manipulation." But here is an eye-opening chart that will help shed more light on this issue.

EWI President Robert Prechter published this chart in his October 2008 Elliott Wave Theorist. Review this chart carefully. For too many investors, the crash of 2007-2009 is becoming a hazy memory. And almost no one in the mainstream financial media talks about the utter panic in the markets in September-October 2008, the worst part of the crash.

If you think back to that time, you may remember that the Federal Reserve and U.S. government took many aggressive steps to help stop the collapse. Every time they would announce a new intervention, the market would cheer. Result? Prechter’s chart gives an unequivocal answer:

Buying on Bullish News in a Bear Market

[+] CLICK TO ENLARGE

As you can see, announcements of bailouts, unlimited credit, bans on short sales, etc., were powerless against the biggest stock market collapse in 76 years. The DJIA kept sliding. It didn’t stop until March 6, 2009 — after it had slipped below 6,500.

So: Is the Fed and the "Plunge Protection Team" engaged in market manipulation? You can browse EWI’s Message Board for some answers, but one thing is clear: When stocks were crashing two years ago, few dared to suggest that the Fed was in the saddle. Bob Prechter puts it best:

"When markets go up, the Fed seems to be in control; when they go down, it seems out of control. But the control aspect is an illusion."

Get the 33-page Market Myths Exposed eBook
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A CASE STUDY ON THE FED’S PERMANENT OPEN MARKET OPERATIONS

A CASE STUDY ON THE FED’S PERMANENT OPEN MARKET OPERATIONS

Courtesy of The Pragmatic Capitalist 

On Friday I posted a story highlighting the market’s outperformance when the Fed performs its Permanent Open Market Operations (POMO).  POMO is nothing new for the Fed so a one month data set is really nothing more than datamining.  If we look back at the data over the course of the last 5 years we obtain a much more realistic (and potentially disturbing) perspective of the market’s performance on days when the Fed performs its POMOs.

Since October 2005 there have been 205 operations.  On the day the operation was performed the market finished negative 41% of the time, positive 53% of the time and finished flat 6% of the time.  The total return on these days was +27.28%.  This is equivalent to a +48.6% annualized gain.  A look under the hood provides a more useful perspective on the data, however.

Of the days that were positive 63% of the total gains occurred on just 3 days in March 2009.  If we remove these three days the total gains equal +9.98%.  This is equivalent to a +18% annualized gain.  If we remove the best AND worst three days from the set the total return surges to 18.1% or a 33.1% annualized gain.

Perhaps the most interesting perspective in all of this is just looking at the market’s long-term performance when the Fed is conducting these operations.  As you can see below the market has performed dramatically different when the Fed is conducting POMO’s.  The Fed ceased POMO’s in May of 2007 after a fairly steady schedule.  The market declined almost 20% in the following year and a half.  They did not initiate the program again until September of 2008 when the economy was melting down.  Technically, the program began on September 19th 2008 just days before the Lehman crash.  This skews the beginning point of the credit crisis set of operations enormously.  If we take that exact starting point the market fell -2% between then and the last operation on March 24th 2010.  Of course, one could easily argue that the September 2008 operations were largely useless as the market was already in meltdown mode.

Between March 24th and August 17th of 2010 when the program was halted the market declined -6.5%.  Since restarting the program in August the market has risen 8.3%. 


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Goldman Advises Clients To Front Run The Fed Via POMO

Goldman Advises Clients To Front Run The Fed Via POMO

Courtesy of Tyler Durden, Zero Hedge 

After a few months of breaking down what the simplest trade in the world is, that would be frontrunning the Fed for the cheap seats, Zero Hedge is happy to advise our readers that finally Goldman Sachs itself has capitulated and is now indirectly telling its clients to frontrun Ben Bernanke via POMO. No complicated value investor nonsense, no pair trades, no cap structure arbitrage, no hedging, no levered beta plays. Buy ahead of POMO. Sell. Rinse. Repeat.

From a GS distribution to clients:

On the interplay between the FED and STOCKS: Since Sept 1 – when QE was becoming a mainstream focus – if you only owned S&P on days when the Fed conducted Open Market Operations (in US Treasuries), your cumulative return is over 11%.  in addition, 6 of the 7 times when S&P rallied 1% or more, OMO was conducted that day. this compares to a YTD return of 5.8%.  the point: you would have outperformed the market 2x by being long on just the 16 days when – this is the important part – you knew in advance that OMO was to be conducted. The market’s performance on the 19 non-OMO days: +70bps.

And there you have it – the top in frontrunning the Federal Reserve is now in.

The most recent Fed POMO calendar is linked (there is one tomorrow). Frontrun away.

Oh, and Ben, your criminal organization will one day pay for making a complete manipulated travesty out of capital markets. 


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Phil's Favorites

Ukrainians are divided over Trump's 'quid pro quo'

 

Ukrainians are divided over Trump's 'quid pro quo'

Ukrainians don’t agree on how their president should have handled Trump’s request. Andreas Wolochow/Shutterstock.com

Erik C. Nisbet, The Ohio State University and Olga Kamenchuk, The Ohio State University

As Americans turn their attention to the first p...



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Zero Hedge

What Blackout Period: BofA Just Had Its 6th Busiest Week Ever For Stock Buybacks

Courtesy of ZeroHedge View original post here.

It's time to finally put the entire "buyback blackout" myth to pasture.

Commenting on its client flows during the past week in which the S&P 500 closed up 0.9%, Bank of America clients were net buyers of US equities after a week of net selling. Both single stocks and ETFs saw inflows, marking the ninth straight week of ETF inflows.

Looking at the breakdown of client activity that crossed its trading desk, BofA writes that hedge funds were net sellers after buying for six weeks, while in a mirror image of activity, institutional clients bought for the ...



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The Technical Traders

Welcome to the Zombie-land Of Investing - Part II

Courtesy of Technical Traders

In Part I of this research post, we highlight how the ES and Gold reacted 24+ months prior to the 2007-08 market peak and subsequent collapse in 2008-09.  The point we were trying to push out to our followers was that the current US stock market indexes are acting in a very similar formation within a very mature uptrend cycle.

We ended Part I with this chart, below, comparing 2006-08 with 2018-19.  Our intent was to highlight the new price hig...



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Kimble Charting Solutions

Bank Breakout Of Financial Crisis Highs or Double Topping Again?

Courtesy of Chris Kimble

If the saying “So Goes The Banks, So Goes The Broad Market” is true, banks are facing a critical breakout/resistance test in my opinion.

This chart looks at Financials ETF (XLF) over the past 12-years. This chart reflects that a double top took place prior to the financial crisis getting started.

XLF has remained inside of rising channel (1) since the lows in 2012. It hit double resistance at (2), then it declined nearly 25%.

The decline then tested rising support at (3) and a strong rally has followed. The rally now has XL...



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Insider Scoop

Barrington Downgrades Fluent After Earnings Miss, Stock Drop

Courtesy of Benzinga

Fluent Inc (NASDAQ: FLNT) fell short of top- and bottom-line third-quarter estimates. Some suspect the missed metrics herald longer-term underperformance.

The Rating

Barrington Research analysts James Goss and Patrick Sholl downgraded Fluent to Market Perform but maintained a $5 price target....



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Digital Currencies

3 Reasons Why One Trader Didn't "Manipulate" Bitcoin Price To $20K

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Bitcoin price highs in 2017 were not the result of a single trader on an exchange, the CEO of payment company Circle claims. In a series of tweets on Nov. 4, Jeremy Allaire disputed ...



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Chart School

Gold Gann and Cycle Review

Courtesy of Read the Ticker

Gold has performed well, golden skies are here again. In fact it has been a straight line move, and this is typically unusual and a pause can be expected.

It seems the markets are happy again, new highs in the SP500, US 10 year interest rates look to re bound, negative interest may soften. The US FED has reversed their QT and now doing $250BN (not QE) repo. The main point is the FED has stopped QT, and will do QE forever. The evidence now is the FED put is under market risk and the possibility of excessive losses do not exist. 

Point: If in future if there is market risk, the FED will print it's way out of it.
Subject To: In this blog view. The above is so until the amount required rocks confidence in the US dollar as a reserve currency.&n...



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Lee's Free Thinking

Today's Fed POMO TOMO FOMC Alphabet Soup Unspin

Courtesy of Lee Adler

But make no mistake, if the Fed wants money rates to stay down by another quarter, it will need to imagineer even more money.

That’s on top of the $281 billion it has already imagineered into existence since addressing its “one-off” repo market emergency on September 17. This came via  “Temporary” Repo Man Operations money, and $70.6 billion in Permanent Open Market Operations (POMO) money.

By my calculations that averages out to $7.4 billion per business day. That works out to a monthly pace of $155 billion or so.

If they keep this up, it will be more than enough to absorb every penny of new Treasury supply. That supply had caused the system to run out of money in mid September.  This flood of paper had been inundati...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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