No need to rehash a QE that will deliver $1b a day or more in bunches and work the 30yr to control rates. It was disappointing and the market reacted as such (after a bit of digestion). STB thinks the Fed is holding back for bigger events to come and had to deliver something.
Let's hit the news quickly. Not sure how long I have been telling you to focus on the EU liquidity situation, but it has been a while now. Call this The (ZH) downgrade edition
Bank Downgrades Jump The Atlantic: S&P Cuts Numerous Italian Banks | ZeroHedge
Moody's Goes For Trifecta, Downgrades Citi Short-Term Rating Of Citi From Prime-1 To Prime-2 | ZeroHedge
Double Tap For Octogenarian Of Omaha: Wells Downgraded From A1 To A2 | ZeroHedge
Suck It Up Warren - Moody's Downgrades Bank Of America From A2 To Baa1 | ZeroHedge
French Banks Resume Tumble After ECB Announces One Bank Taps Dollar Swap Line For $500 MM Again | ZeroHedge
Hope Fades In European Financials | ZeroHedge
UK QE To Resume In October | ZeroHedge
And the chart I have been showing a bunch lately - the financials - Leadership at its finest - reminds me of our president!
Note the 30 year's reaction in times of QE and non QE. I have a longer version of this chart that captures the same story for QE1. You TLT (pink in this chart) followers (that got rewarded today) need to know this tendency. While you are there click thru the other 30 year charts as well. OBTW - this is pure insanity you are witnessing in this chart.
DOW - Closed just above black wedge support. Note the backtest of the busted blue support diagonal. NOTE - if the /YM or DOW are completing a right shoulder here - we're talking roughly 900 points or near 10,000 target. WOW!
Minis - Stopped at wedge channel support that STB identified Monday night Memorial day. That is a massive nasty 4hr candle. Note the bust of the backtest of the blue diagonal here (compared to DOW above - comparing futures to futures - the/YM struggled to cross this diagonal).
Housekeeping - Some of you (TJ and Soup I know of) were not able to get in to comment today at some point in time. I have no clue what Disqus is up to. Some old tricks that I thought they had worked thru but apparently have not. If you ever are having any issues with the blog or see something strange please email me immediately at the one provided in the top right. I am sorry that this happened. I am in the search process for something that will not break and be more reliable for the new STB 3.0 that is coming soon.
Thanks for another great day on the blog.
GL and GB.