Obey!

1:16pm EDT: I love it when the tape obeys me almost to the tick (i.e. compare last night’s chart to the tape today):

We could see equities hurl a bit more before we get an acid reflux to the upside. But technically we had ourselves a nice clean motive wave which should be followed by a zigzag to the upside – or maybe some sideways action – we shall see. I would probably dip my toes into puts around 928 – there’s a chance we pop towards 938.

3:12pm EDT: Looks like we are consolidating sideways again – careful if you are long. BTW, good ole’ Karl ‘No Slave To Fashion’ Denninger just elaborated on my TOMO post this morning – go check it out – it’s a great read – and unlike me he really knows the treasury market inside and out.

Anyway, based on the 9:04 update on Karl’s page it seems that Curly is serious about keeping liquidity flowing into equities – for now. My own personal theory on that is that there are probably a few top cronie banks who are in the process of closing their 2nd round of financing right now.

Like Karl I used to watch the daily TOMO announcements (and there are also POMOs which don’t have to be repaid at all – but that’s a different story). When that game stopped on December 30th I was a bit confused but that new slosh report page Karl posted (and which was also mentioned on Jeff’s blog) adds TIOs and TAF into the mix – which is ‘wunderbar’.

If you want to educate yourself on what all this means, look no further than this excellent article by Deepcaster. He’s a bit long winded and repeatitive but is one of the ‘tin foil hats’ I enjoy reading regularly.