M4: There is a distinct correlation. Google "Visualizing a POMO Market".....I posted the article previously but the chart does not copy. Look at the chart that is the basis of the article and contrast the chart based on POMO days vs. the chart based on non POMO days. There is a huge gap in performance between the two. It is no mere coincidence. Yesterday we had no POMO and the market dropped. Today we have had POMO and the market is up. No surprise. There are something like 9 more POMO days until the election...one almost every day. They're pulling out all the stops. But there have been subtle signs that the effect of POMO is beginning to wane and is requiring higher and higher $$$ infusions which are then used by the Primary Dealers to further ramp uf the few remaining asset classes still in bull relief rallies. Even with today's POMO the DOllar index has stayed above the overnight low of 76.924 on Monday night. To me it looks like the Dollar is hitting a series of higher lows...which is bullish for the Dollar and bearish for risk assets in the intermediate term. On Oct 15 the Dollar index slid to 76.144, Monday night it's low was higher at 76.924, today's low so far has been 77.06. And while the Dollar has been hitting a series of higher lows we see the opposite in risk assets which are hitting a series of lower highs. For example the S&P hit 1185.53 on Oct 18th...it's high today (so far) has been 1182.53. And, despite all the Fed pumping of this market it has yet to test the previous April high of 1219. It is taking this market an eternity to roll over, largely because of all the Fed intervention strategies which don't get nearly the scrutiny that they should. But the intermediate trend is remaining intact, even though most investors either don't recognize the pattern developing or choose to ignore it. But bear markets like to disguise themselves and lead some investors to think a new bull market rally is imminent while in reality it is only a more and more narrow asset class that is hitting new highs while the bulk of risk assets are flat or dropping. But don't listen to me...I'm just the nut case short player who doesn't really know a thing about market behavior or market history and because I have been wrong (so far) I will probably continue to be wrong for the forseeable future.
AI
