Daily Treasury Statement Charts Update: 21/3/11

An update of the daily treasury statement charts:

 

Total Operating Balance Vs S&P 500 Inverted

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Tensions in the markets eased today, and ‘risk’ rallied strongly against fiat currencies. The daily treasury statement showed a $14 billion drop in the total operating balance. The overall trend of the total operating balance remains downwards (at least for another week or two).

 

In a peculiar and alchemistic fashion, the markets have corroborated the thesis that net US Treasury withdrawals are bullish for risk assets and net accumulations are bearish for risk assets (on a lagged basis). The charts of the lagged total operating balance vs current risk assets are posted below. They continue to suggest that – in spite of today’s rally – the market stress will be prevalent for the next 10-11 trading days. After that, there may be some upward movement.

 

Total Operating Balance Vs Dow Inverted (LAGGED)

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Total Operating Balance Vs S&P 500 Inverted (LAGGED)

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Total Operating Balance Vs Russell 2000 Inverted (LAGGED)

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Posted Mar 21, 2011