Assets: Total Assets: Total Assets: Wednesday Level Ideas — FRED:RESPPANWW

$RESPPANWW Fed Balance Sheet at 2020 Level Before QE Very interesting chart to watch here FRED:RESPPANWW Clearly shows we're still in QT, but obviously markets have been pumping. The Fed balance sheet is sitting at $6.9T which is the level in 2020 when the Fed continued its 2nd round of QE. I doubt they would announce they are buying assets again at the next FOMC on 12/17, but quite possibly at the January or March 2025 meeting after Trump takes office.

How to Chart Fed Liquidity I'm going to be clearing out some of my half baked ideas. I don't have a lot of time to write full ideas about them so enjoy the charts and feel free to ask any questions about them if you have any. I'm going to integrate my TV charts into the website with a daily, weekly, monthly analysis. website is in my TV profile or find me on twitter. ----- The Fed Liquidity used in Master of Markets Idea What is Fed liquidity? To determine Fed Liquidity you can simple use this ticker FRED:RESPPANWW-FRED:RRPONTSYD-FRED:WDTGAL The Total Assets of the Federal Reserve Balance sheet at 8.382 Trillion. Subtract The Treasury General Account at 451 Billion Then Subtract the 2.142T Overnight Reverse Repo You get 5.789 Trillion in Net Liquidity which hasn't come down a heck of a lot since the last time I tallied up 5.9T

Master of Markets This is an update to a chart I posted last September Trading View updated the scale for ON RR so I'm reposting the idea so we can watch the rise/fall in playback. Wall Street banks are now drinking the market liquidity cool-aid. I wonder which one will be the first to implode this time. 2006-08 was a time of idiots without Money 2020-22 will be the time of idiots with to much Money.

Master of Markets In 2008 the U.S. central bank purchased $1.25 trillion in mortgage-backed securities $200 billion in agency debt $300 billion in long-term Treasury securities 2008 was named QE1 and would continue for the next 6 years before the FED paused and eventually began to tighten. During times of QE, banks, companies, markets all perform great. There is plenty of liquidity to operate, margin is cheap. When the fed tightens, markets get volatile. Margin becomes expensive. Most companies will survive this volatility. They just pass the cost on to the consumer. This creates inflation. Sticky inflation. Fed has to tighten more to fight inflation. At this point it’s all they can do. But they risk crashing the markets. The fed controls just how much air is let out and how fast. That’s why you saw Jay Powell start with easing, into light QT and now in September the amounts they will be selling are very likely to put more down pressure on the markets. Just realize the FED can manage the market pressure, it’s the unexpected events during times of low liquidity and high volatility that concerns me. See the effects of Net liquidity on VIX over the past 15 years. Never reaching above 30 except during extreme events like the flash crash and china crash.. You can see we’re in a time of extreme volatility as clusters of volatility reaching over 30 4 times since Nov 2021. What is Net liquidity? Net liquidity is a formula I found on Fintwit that is supposed to predict the markets movements 2 weeks in advance. I don’t know if I believe that, but I did some Covariance analysis and there are certainly times during QE with high bullish correlation and QT there is high bearish correlations. To determine Net Liquidity you need to take The total assets of the Federal Reserve Balance sheet at 8.8 Trillion. Subtract The Treasury General Account at 617 Billion Then Subtract the 2.1T Overnight Reverse Repo You get 5.9 Trillion in Net Liquidity. Changes in the level of Net Liquidity (step up or step down) are claimed to predict the S&P 500 direction 2 weeks in advance. The claim is that of a 95% correlation since the transitory quantitive easing and reverse repo were implemented. I was curious to see if the claims were true. More on that tomorrow.

Assets: Total Assets: Total Assets: Wednesday Level

RESPPANWW trade ideas