Tuesday, July 12, 2016

Elazar: Direct Fed Impact On Stocks: Coming Tightening A Risk To S&P 500

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*We are about to show that each weekly tinker down in Fed reserves seems to magically coincide with a market down move.
*We think it also shows the Fed tinkers it down when the market is up and pushes it back up if the market drops.
*The Fed has stated its desire to lower these reserves.
*We see this as the market's major risk — unless the Federal Reserve has been reading all our reports, in which case it will probably hold off.
We've shown the correlation between moves in Federal Reserve balances and stock market (NYSEARCA:SPY) returns. Now with strong jobs numbers, we think a rate hike is on the table, and Fed's reserve balances will drop ahead of that. We now show a direct correlation between weekly Fed tinker adjustments to their balances and an almost immediate back-and-forth push on stocks. This may debunk the stock buying rumor, but this should be enough to show the Fed's incredible sway on stocks.
Weekly Fed Moves Push Stocks
First let's show you the grid. In the middle column you have SPYs. In the right column you have the $4 Trillion Federal Reserve balances adjusted to line up with the SPY price.
The bold and arrows show you how the right column ("FED") moves predict the left column ("SPY") moves. These are week-to-week changes for each.

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS