POMO Update 2.0

So, I posted an updated POMO chart yesterday and then my hosting company flips the DNS settings and it all disappears into digital oblivion. As I am still catching up with server transfer issues and since it’s an important chart I thought I’d simply post it again.

It appears that Banana Ben is kicking the ship into overdrive as we are pushing into record territory on my revolving 20-day POMO chart.

[amprotect=nonmember] Charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
[/amprotect] [amprotect=1,9,5,2] If you are still waiting for Godot (i.e. P3 to the downside) you may want to draw a deep breath, pop a Zoloft, and then take a peek at this:

And there you have it – as you may recall from recent POMO updates here – unless we see a massive draining of the swamp primary dealers are swimming in a massive correction to the downside seems very unlikely. Also note that in recent history it took a draining to almost zero to make a dent in equities. We are currently at a 20-day rolling total of $113.59 Billion – you read that right. Even if the Bernank would cease all treasury POMO auctions effective today it would take at least one month for equities to really start feeling the heat.

Food for thought. After a six month melt up a reversal should always be expected – of course. But as long as POMO auctions (favorable to primary dealers) continue cheap cash should fuel equities higher.

Cheers,

Mole
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