Thursday Outlook: Market Fading

June 17, 2009



Doh!!! Tomorrow is another Treasury auction and to prepare, our fearless Fed is buying while our Treasury is selling. How does that work? Two separate sets of books. The former injects reserves into the system by buying Treasury debt and counts it as an (cough) asset, while the latter sells debt which is a responsibility of the taxpayer. It’s that credit/debit deal. Make sense to you? Tony Soprano knows how this works since he cooked the books and got the vig.

Volume remains light and breadth negative to neutral.



The first two charts indicate different time views. The daily NYMO reflects only ultra-short term conditions. In that view we see markets as much oversold. But the intermediate to longer term Summation Index shows a much overbought market rolling over. The latter is a more impressive condition and warning flags are being posted.












































































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