It's All About The Base, The Monetary Base

Includes: DIA, IWM, QQQ, SPY
by: Mott Capital Management


The markets have rallied nearly 5% since Wednesday's low.

The monetary base has rebounded to near $4.0 trillion.

Reserve repo market has calmed.

The equity markets have rebounded sharply since hitting that 1814 low in the S&P 500. Which, we pointed out within an hour of it's happening. The S&P is trading above 1900 this morning and has rallied nearly 5% since that point. Below I will show the three Federal Reserve Charts I pointed out the other day.

We can see the St. Louis Monetary has rebounded from the low set at the beginning of the month.

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The Reverse Repo market also appears to have normalized again.

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Finally, the Reserve balances with Federal Reserve Banks has also been increasing.

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Upon the new data's publication I will update these three charts. I think it is important to watch them.

I know there has been a lot of talk recently from central banks around the world that would seem to show help is on the way. I suspect that same tone will come from the Fed next week as well at after the FOMC meeting.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.