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POMO Day #2 - Be Careful With Those Shorts
As a reminder, today is POMO day #2. The Fed will monetize (but don't call it that or you will get Tim Geither's panties in a bunch) anywhere between $2 and $2.5 billion. And with the implicit 10-20x leverage by the Primary Dealers, the otherwise vapor volume, the "mo[r|m]onic robot" acceleration effect, this meager reliquification amount could be sufficient to push stocks up by about 0.5-1.0%. This will be even easier now that many shorts have leaned into the market post the horrible Initial claims number, and a manufactured short squeeze courtesy of the Fed and State Street is all but guaranteed. In other words, be very cautious shorting today - here there be printers.
As for Treasuries which will most likely be tendered for, we use the trusty Morgan Stanley cheat sheet:
- 3.0% of 2/28/2017
- 3.25% of 3/31/2017
- 3.125% of 1/31/2017
- 3.25% of 12/31/2016
- 2.75% of 11/30/2016
- 3.125% of 4/30/2017
- 2.75% of 5/31/2017
- 3.125% of 10/31/2016
- 3.0% of 9/30/2016
- 3.275% of 7/31/2017
Of course as these have already been pre frontrun by the active UST dealers, the reaction post the 10:15-11:00 am auction block will likely be one of easing, meaning at this time the correct trade is to short these for a basis point or two.
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OK seems SIMPLE to play it short, you know theyre going to pop it .5% or so, so unless we assume all shorts are retarded, wait for the POMO garbage pump, THEN short it? Just sayin....
I read this and I thought of Conrad Murray's post last night about the phone booth with cash flying all around.
Yes, it is clear that the markets will rise today. I predict a 0.75% rally in the S&P on renewed QE expectations.
Thankyou TD, so the 7-year bucket should be toasted by close tonight...
For stocks - short the open, buy 5 mins later, ride the rally, flat for the data, wait for a reaction and in all probability ride the melt up to the european close.
Am gently selling gilts too which look a bit heavy for the first time in weeks, they may follow the US bonds...
All the macro thinking I do and I just end up front running the government. What a life.
"All the macro thinking I do and I just end up front running the government. What a life."
LOL.... wait till the BOJ steps in and we have a currentsea of POMO US +POMO JPY ... you can front run them both
Me thinks Pomo spill over won't be enough to take on sellers today.
Keeping my Estoxx shorts on...no tears
At some point their tricks will have no effect, maybe its today, reality is a mother%$&#er.
I'm waiting for some fundamental analysis that explains the action in the equity market this week.
"Welcome To The Recovery" - there is you fundamental analysis.
Now go forth, and go all in on hard 8.
The market is fundamentally broken, does that help?
The economic system and all that entails is fundamentally broken.
And yes, that does help. My motto is "Never refuse an offer of free K-Y." :>)
Try this Ferguson.
Head to Spencers and grab one of those magic 8 balls.
Now head to The bookstore and pick up "Fun with Ponzinomics" written by Mr. Bernanke
Now come home turn on CNBC and whenever Liesman is on turn the Television up as loud as possible.
Shake the ball, read a chapter and all will become clear.
Best wishes
Thank you all for your input. My spirits have been lifted.
Chart: ES
Prices have fallen back into the downward channel; likely to have lower prices still. Good luck, folks.
http://www.screencast.com/t/NjZlMTVmZj
With POMO & OpEx this week bar some unforeseen shock it's gonna be all green IMO.
"Here there be printers"
Thanks for that. I nearly spit my coffee at the gal walking in front of me for that laugh. Anyway maybe they take markets down today's and use the Pomo cash tomorrow to give some semblance of reality.
dont expect a whole lot of sloshing into expiration equities other than the state ordered GM pony. Watching 1085
Watching 1085
So, no POMO bounce today?
Just because we had the clearest evidence that the economy sucks...
No POMO bounce today?
I want to trade!
Hey maybe its a double cross, since they know that we know that they know, and everyone EXPECTS a POMO pop, today they could have set up to korn hole the overconfident BULLS? Just sayin!
SPX brushing that 1085 mark, but have no fear for POMO in t-minus 20 min to save the day.
uh... as of now, treasury website says no purchases scheduled right now...
http://www.newyorkfed.org/markets/pomo/display/index.cfm
website updated w/ upset
ok, its back on tap. they refreshed, time to cover.
Thanks for warning, but I'm not so sure. Whenever you expect something thats when it doesnt happen. lol
Rosie was right.
every wiggle is a manufactured farce
SPX should be around 0 right now
So far, so good on the short side.
POMO done but no bounce...ruh roh
http://www.newyorkfed.org/markets/pomo/display/index.cfm
Wait for it.
I think Fed might have their 3rd string on the field right now, website not being updated, the crazy bid hasnt appeared.... if this doesnt happen, colour me massively confused.
Pertinent data:
http://v3.caseyresearch.com/images/Linear-Dow-orig.gif
http://pragcap.com/the-myth-of-the-great-bond-bubble
THE NEXT LEG DOWN ...
http://stockmarket618.wordpress.com
There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
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