Sunday, November 24, 2013

Charts 11-22: Another POMO calendar approaches

Each month now, while the very idea of "tapering" is out there, we have a potential violent turn with the announcement of the next month's POMO schedule:

The next release of the tentative outright Treasury operation schedule will be at 3 p.m. on November 27, 2013. At that time the Desk will publish information on transaction prices for securities included in the operations listed above.

We continue to see regular TOMO -- temporary -- operations, where Treasuries are sold back into the market.  We had TOMOs all week -- why?  Who is starved now for quality collateral?  What's going on out there in the shadow banking system?

So all eyes are on Wednesday, while the indexes and VIX continue to form wedge shapes.

SPX 11-22
NDX 11-22
VIX 11-22


Bicycle said...

Comet ISON hits perihelion on 11/28.

Christian Gustafson said...

One reason I was kind of quiet last week, Bicycle, was that McHugh had one of his "phi mate" turns scheduled for 11/20, and I didn't want to mention it. It is his work, after all, based on his own structural analysis of market cycles.

11/20 may have marked a minor low and turn north, hopefully into a final high. The indexes are certainly giving clues for some kind of turn.

Everyone expects a "pullback" now, OK, fine. Where it gets interesting is when the bounce from that "pullback" rolls over into a "wave 3". That will be a doozy.

The POMO schedule announcement this week is again exactly the sort of event that may give us a final top and end to this ZIRP/QE rally, and the start of something very very bad.

Or the bears are wrong again, and the economy really can run on QE, unpayable student debt, and subprime 7-year car loans.

Bicycle said...

Or the State Department angers Saudi enough with the Iran deal that they start cutting oil shipments to the West. Steve's triangle breaks to the north and QE has to cease--immediately.

'Merica will want a war like never before. Except we won't even be able to run a supply line across the Atlantic...