Daily Treasury Statement Charts Update: 15/3/11

An update of the daily treasury statement charts:

 

Total Operating Balance Vs S&P 500 Inverted

Click to enlarge.

 

Today was another very weak day for risk assets; the downward moves being initiated by bad news out of Japan. The total operating balance of the US Treasury rose yesterday (latest), increasing by $10 billion. However, with the unwinding of the supplementary financing account, it continues broadly lower.

 

As I have said previously: 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 13-14 trading days:

 

[Again, although correlations may seem compelling, one should be wary of them. The following could be likened to 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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Posted Mar 15, 2011