Daily Treasury Statement Charts Update: 4/3/11

An update of the daily treasury statement charts:

Total Operating Balance Vs S&P 500 Inverted

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The total operating balance of the US Treasury continues its decline. The supplementary financing program is being unwound to $5 billion, and now stands at around $75 billion. They have been reducing it at a rate of $25 billion per week, so it should take 3 weeks to get down to the intended low of $5 billion.


Using the thesis that heavy expenditures are bullish for risk assets and accumulations of cash are bearish, I now present the total operating balance with some risk assets lagged ~40 trading days. According to this thesis, the market could remain weak for about 20 trading days before swiftly moving higher for a final ‘crack-up’ move.


Dow Inverted Vs Total Operating Balance Line

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S&P 500 Inverted Vs Total Operating Balance Line

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Russell 2000 Inverted Vs Total Operating Balance line

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VIX Vs Total Operating Balance Line

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I’ll be updating these everyday after the release at 4:00 PM ET. As in my previous posts (here and here), I’ll update the deposit insurance fund and TARP charts when something happens. The past couple of days have been quiet for these.


Again, I should warn that this may be regarded as an imprudent form of looking at things. For me, speculating is the art of finding the loser and opposing him; that is, of being a contrarian. But perhaps there is some contrarian merit in these charts?

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Posted Mar 4, 2011