Daily Treasury Statement Charts Update: 10/3/11 – The Mystery Continues…

An update of the daily treasury statement charts: – The Mysterious leading indicator continues to perform…

 

Total Operating Balance Line Vs S&P 500 Inverted

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It was a rough day in the markets (for most people); the dollar appreciated versus equities, commodities and most currencies. The total operating balance of the US Treasury continued down yesterday (latest), declining by $8 billion. The market continues to corroborate the thesis that heavy expenditures are bullish for risk assets and accumulations of cash are bearish.

 

If markets are to remain this weak for a while, it is likely that the US Treasury will surprise itself by how much it ‘needs’ to withdraw from its coffers. This could bring the foxing ‘crack-up’ move  that precedes a more profound downward leg. I now present the total operating balance with some risk assets lagged ~40 trading days; the charts suggest that the ‘crack-up’ move could begin in around 15-16 trading days:

 

[Again - let me warn you that this may be regarded as a form of alchemy!]

 

Total Operating Balance Vs Dow Inverted

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Total Operating Balance Vs S&P 500 Inverted

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Total Operating Balance Vs Russell 2000 Inverted

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Total Operating Balance Vs VIX

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Note: the auctioneer stocks remain weak today. My theory on why they lead the market at tops and bottoms is here.

Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression

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Posted Mar 10, 2011