The Fed's Balance Sheet Versus The Hindenburg Omen, Fibonacci Retracement And Elliot Wave

Confounded Interest ^ | 08/11/2013 | Anthony B. Sanders

[whitedog57]

The Federal Reserve’s Balance Sheet has swelled to $3.6 trillion since 2008. And The Fed keeps adding $88 billion in Treasury and agency mortgage-backed securities purchases each month.

fedbal081113

The stock market has taken off like a jackrabbit, particularly after March 18, 2009 when the Federal Reserve’s Open Market Committee (FOMC) announced that the program would be expanded by an additional $ 1 trillion in purchases of Treasury and Agency MBS securities. $750 billion in purchases of agency MBS and $300 billion in Treasury purchases, to be precise.

fedbalspx

Now The Fed is hinting at tapering of the $88 billion per month Treasury and Agency MBS purchases. If that happens (and depending on quickly or slowly that happens), the stock market may tumble.

The Hindenburg Omen is flashing red signaling a possible correction. The Fed Balance Sheet is represented by the bright green line. A tapering of the Fed’s purchases may be driving what is often called the Hindenburg Omen.

hindfedbal

The Fibonacci Retracement is approaching the 100% barrier last seen October 31, 2007. Generally, stock prices begin to fall (the Golden Arc).

fibonaccifednal

Finally, the Elliott Wave follows repetitive patterns or waves. Of course, The Fed’s unprecedented Treasury and Agency Purchases is a wave (or Tsunami) on its own.

elliottfd

The stock market has been buoyed by the Fed’s monetary policies. But unless there are real corporate earnings growth behind the stock market, we could see a correction.

perate

[whitedog57]

Stocks are seemingly unjustified by earning and are only high because of Fed money printing. When it ends, it won't be pretty. Look at the bright green line representing the Fed's balance sheet.

[humblegunner]

Look at the bright green line representing the Fed's balance sheet.

[ken5050]

By far, the best headline of the year...

[upchuck]

The Federal Reserve’s Balance Sheet has swelled to $3.6 trillion since 2008. And The Fed keeps adding $88 billion in Treasury and agency mortgage-backed securities purchases each month.

The stock market has taken off like a jackrabbit, particularly after March 18, 2009 when the Federal Reserve’s Open Market Committee (FOMC) announced that the program would be expanded by an additional $1 trillion in purchases of Treasury and Agency MBS securities. $750 billion in purchases of agency MBS and $300 billion in Treasury purchases, to be precise.

Now The Fed is hinting at tapering of the $88 billion per month Treasury and Agency MBS purchases. If that happens (and depending on quickly or slowly that happens), the stock market may tumble.

The bid to cover on the 30 year Treasury bond was the second lowest since March 2009.

And if we overlay the gold spot rate (yellow line, of course), you can see the deflation in gold prices as The Fed really cranked up Treasury and Agency MBS purchases.

The Hindenburg Omen is flashing red signaling a possible correction. The Fed Balance Sheet is represented by the bright green line. A tapering of the Fed’s purchases may be driving what is often called the Hindenburg Omen.

The Fibonacci Retracement is approaching the 100% barrier last seen October 31, 2007. Generally, stock prices begin to fall (the Golden Arc).

Finally, the Elliott Wave follows repetitive patterns or waves. Of course, The Fed’s unprecedented Treasury and Agency Purchases is a wave (or Tsunami) on its own.

The stock market has been buoyed by the Fed’s monetary policies. But unless there are real corporate earnings growth behind the stock market, we could see a correction.

Stay focused, my friends!

whitedog57, how come you won't do this? Tony Sanders' post are excellent. But without the charts his posts are pretty worthless.