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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: kailuabruddah who wrote (29686)	3/30/2005 2:12:44 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

I think the SPX dies right here at 1177-1178 resistance, although the QQQQ might push towards 37.00. I will write some May 37 calls naked at that level. There are 13.25 in Fed repos, and 13.0 billion in Treasury TIOs going off Thursday (plus 22.5 combined on Friday), and a large auction settlement. It will be tough to replace that (coupon passes?) without stirring the USD vigilantes. I bought May 55 PEP puts, very small time premium. Banging into overhead, bearish divergences everywhere. stockcharts.com[l,a]daclniay[pd20,2!b50][vc60][iUc20!Lf]&pref=G wallstreetexaminer.com Over the last couple of months, we have drawn a direct correlation between Fed adds and withdrawals and day to day market action. On days when the Fed adds, the market will remain firm or will rally (depending on the size of the add). On days the Fed drains (or allows repos to expire without replacing them), the market is weak and often tumbles. All the while, the US economy and primarily the Federal Government, continue to gorge on ever increasing amounts of new debt. Since the Fed is not creating new money to accommodate this debt, the money is being drained from the wealth of the US economy as a whole. This explains why the market has been less responsive to Fed adds and more responsive to drains in recent days. Over the last two weeks, the Fed has added significant short term reserves and the markets have continued their decline.