Never mind the manic media headline of “NO CHANGE” … there’s a BIG one here.
Allegedly, “Heli-Ben” is going to purchase $300B of longer-term Treasuries, $750B of MBS, $100B of GSEs…
This, as one of my macro teachers (Tim Russert) would have said “is BIG!”…
Why is it BIG?
1. Buying Treasuries breaks the buck
2. Buying Treasuries breaks the buck
3. Breaking the Buck = Equities Breakout!
The US Dollar is getting smoked here. Bullish TREND line support of the USD is now under siege – that support line for the USD Index = 85.26; we’re trading 85.27 now! The dominant Macro inverse correlation for 2009 remains USD vs. SP500. There is NO upside resistance now in the SP500 up to the 812 line. Short Sellers, beware of the Shark Line; there’s a pile of downside SP500 support built up down on that line at 759.
KM
Keith R. McCullough
CEO & Chief Investment Officer
Allegedly, “Heli-Ben” is going to purchase $300B of longer-term Treasuries, $750B of MBS, $100B of GSEs…
This, as one of my macro teachers (Tim Russert) would have said “is BIG!”…
Why is it BIG?
1. Buying Treasuries breaks the buck
2. Buying Treasuries breaks the buck
3. Breaking the Buck = Equities Breakout!
The US Dollar is getting smoked here. Bullish TREND line support of the USD is now under siege – that support line for the USD Index = 85.26; we’re trading 85.27 now! The dominant Macro inverse correlation for 2009 remains USD vs. SP500. There is NO upside resistance now in the SP500 up to the 812 line. Short Sellers, beware of the Shark Line; there’s a pile of downside SP500 support built up down on that line at 759.
KM
Keith R. McCullough
CEO & Chief Investment Officer