Daily Treasury Statement Charts Update: 9/5/11

An update of the Daily Treasury Statement Charts for 9/5/11:

 

Daily Treasury Statement - Total Operating Balance Vs S&P 500

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The total operating balance of the US Treasury fell by $23 billion last Thursday and by around $2 billion last Friday (latest). After a grueling week of price declines, we saw a recovery in most conventional ‘risk assets’ yesterday. As Pater Tenebrarum at Acting Man pointed out the other day, sentiment has reached record bullishness, so the interpretation of the daily treasury statement indicator is that this could be a ‘final move’.

 

However, that being said, the lagged daily treasury statement charts (below) continue to suggest that this short-term up-trend could continue for around 5 weeks. For those just stumbling onto greshams-law.com: As always, I warn that this interpretation could be deemed to be alchemistic in nature. The broad thesis is that net government spending is bullish for asset prices (on a lagged basis) and net accumulations of cash are bearish for asset prices (on a lagged basis). For a more detailed interpretation of these charts see here.

 

Daily Treasury Statement - Operating Balance Vs Dow Inverted LAGGED

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Daily Treasury Statement - Operating Balance Vs S&P 500 Inverted LAGGED

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Daily Treasury Statement - Operating Balance Vs Russell 2000 Inverted LAGGED

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Daily Treasury Statement - Operating Balance Vs VIX LAGGED

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See here for our collection of rare historical economic data.

Posted May 10, 2011