The headline for the July 18 update on this subject was “As Good as It Gets.”
7/18/22 The setup for both bond and stock market bulls will be as good as it gets for the next 3 weeks. So don’t be fooled. Get ready to do some more selling, or short selling, if you’re of that disposition.
Well, guess what. Time’s up. Party over. The Treasury has revised its issuance forecast, as we knew it would. It will now be slamming the market with both coupon supply (notes and bonds) and T-bills.
The T-bills are the biggest difference. The Treasury had been paying down massive amounts of T-bills for months, stuffing cash back into the accounts of money market funds, dealers, banks, and investors. That game is now running in reverse. The Treasury is now sucking money out of the system from those same players. And the Fed isn’t replacing it. The cash that the Treasury uses to repay the Fed disappears from the firmament. Non-subscribers, click here for access.
At least until the Fed restarts QE. Non-subscribers, click here for access.
That’s nowhere on the horizon. Therefore the message remains, xxxx xxxxxxxx xxxxxxx xxxxxxin stocks and bonds. We rely on the technical analysis in the Technical Trader updates for the timing of stock sales and shorting. Non-subscribers, click here for access.
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