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Seems Like it's NEVER GOING TO END...

Series of NR7s

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#1 SemiBizz

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Posted 10 February 2017 - 08:54 AM

Seems like it's never going to end...

 

The last time I recall this extreme was February... 2009.

 

This could go into March now...

 

Specifically in a cluster of confluence between 3/3 - 3/13.

 

 

I read the other day that the Swiss National Bank owns $63B + of US stocks

 

Statistics is amazing stuff, it turns out they owned $61B in August 2016,

 

But that was up from $38B the year before...

 

I suspect there's a lot of that out there...

 

No real adds going into these bloated pig portfolios priced for perfection...

 

 

 

There was a clue about yesterday, we had a series of NR7 days in different issues ahead of it.

 

The rule of thumb there is that the trend decides the odds for up or down...

 

So no surprises.


Edited by SemiBizz, 10 February 2017 - 08:56 AM.

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#2 redfoliage2

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Posted 10 February 2017 - 09:17 AM

All "good news" has been priced in by 200% on the hype of Buying on the rumors.  I don't see any "good news" left unhyped for the year.


Edited by redfoliage2, 10 February 2017 - 09:25 AM.


#3 SemiBizz

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Posted 10 February 2017 - 10:00 AM

Could be a day of EXTREMES....

 

Eclipse, full moon and a comet to occur at same time and light up the night sky in rare event


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#4 pedro

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Posted 10 February 2017 - 10:08 AM

Re SNB, a poster on another board remarked recently that QE in Japan and ECB is taking up sov and corp bonds, freeing up cash to pile into equities.    The bias in those realms is toward US equities as FX hedges.    That goes on until the QE abroad abates.   When that results in a hiccup, Yellen will take up the baton again with some kind of easing.    Slowly but surely, fiat is being driven to zero.     With ever falling numeraires, stocks can only go higher as they are denominated in shrinking confetti money, not a firm yardstick of value.

 

My preferred EW says this ends, and ends badly, but no time soon.    On my longest timeframes, we're at momentum extremes that suggest the needed negative divergences have yet to develop ...  by definition that could take another year or more for one or more large degree w4 and w5 s to unfold.



#5 Data

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Posted 10 February 2017 - 10:51 AM

There is Japan and the ECB continuing with $ 150-180 B/mo in purchases while there's been effectively no borrowing in front of the debt ceiling in March.   As part of the previous debt ceiling agreement, the Treasury is to bring down its cash balance of $380B down to $23B. Japan and Europe each have deficits of around $450B/yr.   The Treasury paydown is cancelling out net soveriegn debt issuance in US, Japan, and Europe.  

 

The only negative offset I've read of is the foreign central bank selling of US treasuries, mainly by China.

 

This condition might reverse temporarily after the debt ceiling is extended.   The Treasury announced its intent to bring its cash balance back to $400B.   The estimated federal deficit of $559B has to be financed in the last six months of the fiscal year.  There'll be a flood of borrowing just as in November-December 2015.  The ECB will reduce its purchases by 20 billion euros in April.  The central bank purchases may well fall far short of net issuance from May to September.


Edited by Data, 10 February 2017 - 10:55 AM.


#6 redfoliage2

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Posted 10 February 2017 - 10:54 AM

Were ECB and BOJ buying less last year? 


Edited by redfoliage2, 10 February 2017 - 10:56 AM.


#7 Data

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Posted 10 February 2017 - 11:16 AM

No.   They expanded buying.  The EU preannounced their reduction of purchase in December.  Japan announced a wider band of purchases of 8 to 12 trillion yen for each month in October or November. It is in the monthly announcements on the BOJ site (in English). But this severe imbalance between issuance and central bank purchases occurs during US debt ceiling standoffs because the US goes on a hiatus from issuing new sovereign debt.   I think 2011 was the exception because of the credit rating downgrade.


Edited by Data, 10 February 2017 - 11:20 AM.


#8 pedro

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Posted 10 February 2017 - 11:43 AM

There may be ebbs and flows on the part of individual central banks.   More flows than ebbs.

Aside from briefly in 2009, the aggregated total continues to grow.

 

https://www.pimco.co...-Balance-Sheets



#9 redfoliage2

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Posted 10 February 2017 - 12:07 PM

Then bonds should have gone up.



#10 Data

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Posted 10 February 2017 - 12:44 PM

10-year yield is essentially at the same yield (2.48%) when the Bank of Japan and the ECB started QE.   Over the same time, the SPX is up 900 points.