Money Flow Trading Method along with Risk Management

So now up to 22 Forex trades and all positions are closed and all in cash and the new Net Profit since February 8, 2021 is $6171.35 US dollars.

Dow closes DOWN 119 points so during the course of the day by trading US30 (Dow 30) trading was much more complex as it stayed positive most of the day even though the NASDAQ and SP500 was mostly down all day.

That once again is where trading experience is needed and the ability to understand what is happening between 9:30 AM and 4:00 PM when the MONEY FLOW is stopped by the close of substantial money flow while North America equity markets are open.


Bruce

I've made$1571.00 today, All SHORTED US30. I will try to upload screen shot shortly if I could.

Thank you, loveandpeace


Bruce

https://finviz.com/futures_charts.ashx?t=YM&p=m5

https://www.zerohedge.com/markets/co...ops+to+zero%29

"Could Get Squeezy Fast" - These Are The Critical Levels To Watch Ahead Of Powell Speech
https://zh-prod-1cc738ca-7d3b-4a72-b.../picture-5.jpg


BY TYLER DURDEN

THURSDAY, MAR 04, 2021 - 10:00
As we have noted in great detail (here, here, and here), today's speech by Fed Chair Jay Powell could be highly significant for banks, the bond market, and implicitly the stock market.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=ocCLZqP0

If Powell were to shock us with language that spoke to enhanced willingness or reinforcement of policy flexibility with their QE purchases (or separately, spoke to another key-topic being SLR exemption extension), then Nomura's Charlie McElligott warns that a bullish UST response could get squeezy fast, in light of the magnitude of the “short” still-held by CTA Trend space.

Here are the levels to watch for big swings in bonds...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=mUIOXM6M

10Y UST Futs...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=jAvnEbEj

As McElligoot notes, it is clear that the ongoing signs of “whites of the eyes” inflation (with ISM Manu Business Prices- and ISM Services PMI on Business Prices- both at highs since ‘08) is at the core of the issue here, as they are then pulling-forward Fed tightening expectations into cross-asset momentum regime where “what has worked” worked for the past decade have been “long duration, short cyclicality”.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=cPaptgyU

Perversely within Equities L/S and M/N world yesterday, it was the intuitively / optically “risk-positive” developments due to the reflation / reopening euphoria which actually then tanked their legacy / crowded / momentum -longs in said “Secular Growth” Nasdaq names, as those are simply “Duration Proxies” which trade correlated to bull-flattening in USTs into this ongoing bear-steepening “reflation / renormalization” narrative blast.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=v9CUjp2h

So as Bonds were throttled again yesterday in yet another powerful blast of bear-steepening, it was more “unwind” as said expensive “secular growth” longs where smashed—which then meant that the “Value Shorts” legs saw massive outsized +++ returns yesterday (i.e. “Cyclical Value Shorts” closed -3.3%” on the day, and with reflation tailwind for “Cyclical Value Longs” driving gains in the other leg as well +0.8% on the big down day, the overall “Cyclical Value Factor” was +4.3%)
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=PwtJe4Kh

And as we noted earlier, this Nasdaq / “Secular Growth” / Expensive Stock pain has now dragged SPX into “negative gamma & delta” territory with it (dealers negative gamma vs spot below SPX 3871, negative delta vs spot below 3819)—yet still, it is the extreme magnitudes of the current QQQ’s greeks which make this market so fragile


Summing it all up: Brace!

So far I have made $1370+, in 03 trades, US30, All SHORTED. Let's see what happens when the Equity markets close.

https://www.adamseconomics.com/post/...-price-ceiling

Bond Market Crisis Will Crack The Silver Market Price Ceiling
The emergence of the current crisis in bond markets across the world will have dramatic implications for not only future economic policy, but also for global commodity and precious metals markets, especially the gold and silver market.

As noted in early February 2021 via the article “The Biden Administration will Accelerate Stagflation”[1], the economic policies of the Biden Administration will accelerate the stagflation phenomenon in the US that commenced under the Trump Administration.

These economic policies include:

1. massive fiscal stimulus and additional government spending, including a proposed $US 1.9 trillion stimulus package and a $US 2 trillion (over 4 years) spending package to address climate change, cleaner energy and infrastructure requirements; and

1. job destroying regulations, such as re-joining the Paris Climate Accord, cancelling major construction projects (e.g. the Keystone XL pipeline and the US-Mexico border wall), prohibiting fracking on federal government land as well as raising the minimum wage to $US 15 per hour.

Accelerated stagflation will manifest itself in various ways including:

1. increased expectations of future inflation;

1. rising commodity prices such as crude oil, base metals such as copper and iron ore, raw materials such as lumber as well as agricultural products such as grain; and

1. rising bond yields resulting from existing portfolio holdings of government bonds being liquidated and weaker private sector demand for newly issued government bonds.

Bond Market Crisis
This last point of rising bond yields has unexpectedly emerged in the week commencing 22 February 2021 with rapid speed, which has caught both financial markets and policy makers off guard.

Concerns that unprecedented COVID-19 pandemic-related economic stimulus will lead to rising inflation and possibly stagflation, even once COVID-19 lockdown policies are relaxed, have been building among investors of government bonds for several months, but have now come to ahead.

The epicentre of the bond market crisis commenced in the United States (US) but quickly spread to other major bond markets in countries such as the Australia, Japan and Germany.

United States
As reported by CNBC,[2] the yield on 10-year US Government Bonds (US Treasuries) exploded to 1.6% on 25 February 2021 on fears that stagflation may be emerging, as opposed to a robust broad‑based economic recovery.

These fears led to a failure at a bond auction of 7-year US Treasuries held on 25 February 2021. As reported by Zero Hedge,[3] the “bid-to-cover ratio”[4] for the auction came in at 2.045 - the lowest on record, signalling weak demand for US government debt.

A major factor of this auction weakness was foreign buyers (known as “indirects”) whose demand for the bond issuance plunged from 64.10% to 38.01%, the lowest level since 2014, resulting in bond dealers being required to purchase 39.81% of the issuance - the highest since 2014.

Record economic stimulus in 2020 by the former Trump administration, coupled with the accelerated stagflation policies of the Biden Administration and political instability resulting from the conduct of American public policy by Washington DC politicians and officials, are likely factors as to why foreign investors are less inclined to purchase US Treasuries, especially at current yields.

Australia
As reported by Zero Hedge[5] on 25 February 2021, the Reserve Bank of Australia’s (RBA’s) yield curve control (YCC) policy of keeping the yield on 3-year Australian Government Bonds at a target rate of 0.1% began to unravel as inflation concerns began to take hold within the Australian bond market.

As the yield began to rise to 0.15%, the RBA was forced to intervene on three separate occasions[6] to keep the integrity of its 3‑year bond yield target intact. This includes purchases of 3-year Australian Government bonds of $AUD 1 billon on 22 February, $AUD 3 billion on 24 February and a further $AUD 3 billion on 26 February 2021.

Concerningly, volatility on the yield of 3-year Australian Government Bonds did not subside at the beginning of the following week on 1 March 2021, triggering the RBA to announce a doubling of its daily bond program from $AUD 2 billion per day to $AUD 4 billion per day[7].

Moreover, concerns regarding inflation and the lack of demand for Australian Government debt led to the Australian Office of Financial Management activating the Securities Lending Facility[8] facilitating the purchase of $AUD 450 million worth of bonds on 24 and 26 February 2021 at subsidised prices.

Importantly, problems in the Australian bond market were not just limited to 3-year bonds, but also manifested itself among 10-year Australian Government bonds as well.

Within the space of 5 months, bond yields on Australian Government 10-year bonds have risen by more than 2.5 times from 0.72% on 15 October 2020 to a high of 1.871% on 25 February 2021. As noted by Australian Financial Review (AFR) columnist Christopher Joye, this rise in Australian Government bond yields was faster than other developed countries.[9]

These developments come on the heels of the RBA’s early-February 2021 announcement to launch a second round of quantitative easing (QE) worth $AUD 100 billion once the current $AUD 100 billion round of QE concludes in April 2021.[10]

At the time of writing on 2 March 2021, the RBA Governor announced the Monetary Policy Decision of the RBA Board’s March meeting[11] indicating that:

1. the RBA Board remains committed to its YCC target of 0.1% on 3-year Australian Government bonds;

1. the RBA is ready to inject a third tranche of QE once the first two $AUD 100 billion tranches (as mentioned above) were exhausted; and

1. accommodative monetary policy was expected to remain until 2024.

Japan
As reported by Zero Hedge,[12] yields on 10-year Japanese Government Bonds rose sharply on 25 February 2021 to 0.18%, the highest since early 2016, and in contradiction to the YCC target set by the Bank of Japan “of around zero percent”.

Germany
As reported by Reuters,[13] the yield on 10-year German Government bonds also spiked reaching ‑0.203% on 26 February 2021, almost tripling from its rate of -0.637% recorded on 11 December 2020.

Immediate Central Bank Policy Response
The emergence of the current bond market crisis provides a catalyst for central banks to clarify their “forward guidance” (i.e., their stated policy intention) as well as implement additional policy steps.

As noted by Bank of America,[14] financial markets (both bonds and equity markets) are now requiring, if not demanding, that central banks take additional steps to provide reassurance. given the turmoil of recent weeks.

Given the market turmoil, failure of central banks to revise their forward guidance and implement an appropriate policy response will see:

1. bond yields continuing to climb as demand for fixed income financial instruments, such as government bonds (both in the primary and secondary bond market), fall;

1. a sharp fall in the value of share market equities (and potentially a share market collapse) as the risk-free cost of capital rises;

1. rising borrowing costs across the global financial system for financial institutions (including banks), non-financial corporations, households and governments;

1. the emergence of defaults on existing debt obligations which, given the scale of the current global debt bubble, will lead to financial contagion and market panic; and

1. financial contagion culminating in a new global financial crisis that will trigger the largest deflationary depression in human history (as predicted by famous deflationists such as Harry Dent).

During the past 13 years, economic policy makers (including central bank officials) across the world have implemented the most extreme form of fiscal and monetary policy stimulus to avoid a worldwide deflationary depression at critical points such as at:

1. September 2008 - during the Global Financial Crisis;
2. February 2012 - during the commencement of the Greek debt crisis;
3. October 2018 – during the Italian debt crisis;[15]
4. January 2019 - following a sharp fall in the US share market in December 2018;[16]
5. September 2019 - the crisis in the US repo market; and
6. March 2020 - during the contagion of the COVID-19 pandemic on financial markets.

Given this record, it is highly unlikely that these economic policy makers and central banks officials will now reverse course on macroeconomic policy, or allow market forces to overwhelm the intent of existing policy settings.

Rather, if recent economic policy and the behaviour of governments and central banks are any guide, we are likely to witness an even greater amount of fiscal and monetary stimulus.

Indeed, as reported by the AFR,[17] an international meeting of finance ministers over the weekend of 27‑28 February 2021, US Treasury Secretary Janet Yellen urged member countries to continue pursuing:

“…significant fiscal and financial policy actions and avoid withdrawing support too early”.

Yellen also stated that, “…If there was ever a time to go big, this is the moment.”

In the case of the US, additional economic stimulus will likely result in the US Federal Reserve embracing YCC as has been noted by several US analysts in recent weeks[18][19][20].

Alternatively, while countries such as Australia and Japan already have implemented YCC at the short end of the yield curve, other policy options to contain escalating bond yields may include:

1. increasing the size of existing QE programs; and
2. expanding YCC to include other points of the yield curve by including longer-term maturities.

Added Pressure to the Physical Silver Market
Importantly, when considering the potential policy impact of YCC being implemented in the United States, it should be noted that YCC was a key policy tool implemented during World War 2 in order to assist in the financing of the American war effort.

As noted by Bloomberg:[21]

“The Fed and the U.S. Treasury agreed in 1942 to cap borrowing costs to fund the country’s participation in World War II. Five years later, inflation was in double digits amid the post-war boom and the central bank was forced to start pulling back.”

Thus, additional economic stimulus measures such as implementing or expanding YCC, or expanding existing QE programs, will likely prove to be inflationary and result in further weakness of fiat currencies, especially currencies not tied to global commodities cycles such as the US dollar.

This weakness will in turn lead to further flight to commodities including precious metals such as physical gold and silver.

The flight to precious metals will not be isolated to one region of the world, but will be likely be a phenomenon of global dimensions given that:

 

1. the bond market crisis has emanated from the US (the largest global bond market)[22] and thus will impact the entire global financial system;

1. central bank policy across the world tends to be of a globally coordinated nature (especially between the US Federal Reserve, the European Central Bank and the Bank of Japan); and

1. significant quantities of US dollar denominated assets are held, not only by Americans, but also by foreign investors.

Examples of this latter point include:

1. non-US holdings of US treasuries reaching $US 7.07 trillion as of December 2020;[23] and

1. US dollar-denominated exchange reserves held by foreign (non-US) central banks reaching 60.5% as of the third quarter of 2020.[24]

Any additional demand for physical silver, in particular, will carry a material consequence given the extreme tightness that has developed in the global market for physical silver during February 2021, as noted in the article entitled, “The Silver Market Fast Approaches Breaking Point”.[25]

In fact, Diagram 1 from that article (which has been reproduced below) illustrates 5 points of stress across the physical silver market that are likely to worsen if additional monetary stimulus results in sustained additional demand for physical silver.

Diagram 1: Global Physical Silver Market
https://static.wixstatic.com/media/c...c,q_5/file.pnghttps://static.wixstatic.com/media/c...dafdb~mv2.webp

Cracking the Silver Market Price Ceiling
Added pressure on the physical silver market becomes an intriguing element in the determination of the spot price of silver when the mechanics and structure of the silver market are taken into account.

As noted in recent articles:

1. “The undeniable manipulation of the silver market”;[26]and
2. “COVID-19 exposes gold and silver price manipulation”;[27]

the current internationally recognised price of silver does not reflect the underlying physical demand and supply fundamentals of the silver market. Rather, the price of silver is being actively supressed by the actions of the New York-based COMEX futures market as well as the London Bullion Market Association (LBMA) and its member organisations (in particular, the bullion banks and bullion refiners).

Moreover, as noted in the article, “George Soros and the Silver Moon Shot” [28], systemic manipulation of the silver market means that, from a market structure perspective, the price of silver is being contained under a price ceiling well below the equilibrium silver price that is multiple times higher than the current price.

Thus, if one accepts the silver market manipulation thesis and if enough pressure is exerted through sustained demand for physical silver via:

1. the wholesale and retail markets;
2. exchange traded funds (or ETFs); and
3. industry

then the spot price of silver is not only likely to rise, but is actually likely to expose the scale to which actual physical silver is mismatched relative to the number of contractual promises of silver ownership and delivery that have been created through derivatives contracts, leasing and rehypothecation.

Exposure of such massive mismatch, which silver analysts (e.g. David Morgan) have claimed may be as high as 1000 paper silver claims for each physical ounce of silver - is likely to result in an astronomical explosion of the spot silver price. This is because institutions that possess unbacked promises to deliver physical silver, particularly at the COMEX, will scramble to obtain as many 1,000-ounce “good delivery” silver bars in order to avoid a default of their contractual delivery obligations.

The central question for industrial consumers and investors of physical silver is whether sufficient and sustained pressure can be exerted on the physical silver market that can break the current manipulated price ceiling.

Austrian economists, based on the writings of economist Ludwig Von Mises, argue that such pressure is all but inevitable. They argue that the general public will, at some future point in time, come to understand that current fiscal and monetary policy settings are caught in a cycle of never‑ending stimulus and that this will lead to a “crack-up boom” resulting in an insatiable demand for all commodities including physical silver.

A “crack-up boom”, as explained on pages 423 - 424 of Von Mises’ book, “Human Acton”[29], is as follows:

“But if once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size.

For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the 'twenties, called flight into real goods (Flucht in die Sachwrte) or crack-up boom (Katastrophenhausse).”

Given that central banks, as noted above, have no intention to allow a deflationary depression to occur, time will tell whether the general public across the world will awaken to the fact of endless and rapid money supply growth and respond accordingly.

The Final Chapter of the COMEX?
Even if a “crack-up boom” was to translate into unprecedented demand for physical silver, perhaps the ultimate stumbling block to a release of the silver price towards true equilibrium will be unnatural interventions by institutions involved in silver market manipulation such as the COMEX futures market itself.

To several American silver analysts, potential unnatural interventions by the COMEX, such as changing market or trading rules) and forcing cash settlement of futures contracts standing for delivery, remain a primary concern.

Such concerns are warranted given that during the silver bull markets of 1980 and 2011, the COMEX in conjunction with the regulatory arms of the US Government intervened to limit the rise of the silver price.

While existing rules give the authorities at the COMEX the ability to manipulate current market and trading rules/settings, any systematic and ongoing attempt to:

 

1. deny counterparties access to physical gold and silver bullion; or
2. provide favourable conditions to bullion banks at the expense of investors and producers

whether through:

1. amendments to the market rules; or
2. forcing counterparties to settle claims in cash

will undermine the legitimacy and ongoing viability of the COMEX as the premier international hub in which gold and silver futures contracts are traded and settled.

The risk that an alternative futures exchange to the COMEX may emerge – one that promises to not abuse their rule‑making capability may act as a sufficient brake on, or deterrent to, any action that prevents the price of silver from moving commensurate with physical demand relative to supply.

Conclusion
With the Biden Administration in power for only five weeks, international anxieties regarding the performance of the US economy, especially with respect to inflation, coupled with the loss of American prestige given reduced confidence in American political institutions has now triggered the start of a bond market crisis through an aggressive sell off of existing US Treasuries and weak demand for newly-auctioned bonds.

This crisis has now spread across the world to other bond markets among developed nations.

The explosive nature of rising bond yields has the potential to threaten the stability of the global financial system and economy, given the size and nature of the current global debt bubble coupled with the risky financial derivatives that are now so pervasive across the world.

Thus, given the Biden Administration’s twin goals of aggressive economic stimulus and financial stability, the only recourse for American policy makers (including the US Federal Reserve) in the immediate future is evermore expansion of the money supply and the balance sheet of the US Federal Reserve – not dissimilar to their response in March 2020 to the onset of the COVID-19 pandemic.

This is also true for other jurisdictions such as Australia, Japan and Europe.

Despite attempts by central bank officials to downplay (and in some cases conceal) the risk of inflation, evident signs of stagflation whether in the US or around the world will likely lead foreign investors to rapidly lose confidence in fixed-income financial assets such as bonds as well as fiat currencies.

The flight away from fiat currencies (such as the US dollar) into hard forms of money (such the physical gold and silver bullion) will exert additional pressure in both gold and silver markets, drying up necessary physical supply required to settle contractual delivery requirements, especially in the COMEX futures market.

In the context of the silver market, the end game question to the current bond market crisis is whether sufficient pressure can be applied that breaks the price manipulation regime with the effect of releasing the silver price from its current price ceiling.

In such an event, the price of silver will shoot up to its unmanipulated equilibrium price.
Economists belonging to the Austrian school of economic thought believe that the psychological power of a ‘crack-up boom’ when manifested at a global level will be sufficient to overpower the institutions and mechanisms involved in the market manipulation of silver, including the COMEX.

Given the global nature of commodity markets in the 21st Century, any attempt to manipulate the COMEX’s market and trading rules to benefit either the US Government or American financial institutions will undermine the COMEX’s legitimacy and threaten its ongoing viability as the world’s focal point for trading silver market futures.

The risk of destroying the COMEX’s international credibility may be the key determining factor that finally liberates the global price of silver.

John Adams is the Chief Economist for As Good As Gold Australia
[1] https://www.adamseconomics.com/post/...te-stagflation [2] https://www.cnbc.com/2021/02/25/us-b...dp-update.html [3] https://www.zerohedge.com/markets/tr...ing-7y-auction [4] The ‘bid-to-cover ratio’ is the dollar amount of bids in a treasury auction vs the dollar amount of bonds sold at the auction. The ‘bid-to-cover ratio’ is an indicator of the demand for US Treasuries. [5] https://www.zerohedge.com/markets/au...verge-collapse [6] https://www.zerohedge.com/markets/ja...lready-sliding [7] https://www.afr.com/policy/economy/r...0210301-p576nr [8] https://www.aofm.gov.au/intermediari...nding-facility [9] https://www.afr.com/wealth/personal-...0210225-p575nn [10]https://www.afr.com/policy/economy/r...0210201-p56yj6 [11] https://www.rba.gov.au/media-release.../mr-21-03.html [12] See footnote 7. [13] https://www.reuters.com/article/euro...-idUSL1N2KW0P2 [14] https://www.zerohedge.com/markets/be...on-coming-week [15] https://www.smh.com.au/business/the-...29-p50ckf.html [16] https://www.cnbc.com/2019/01/04/fed-...s-love-it.html [17] https://www.afr.com/policy/economy/d...0210228-p576g7 [18] https://www.bloomberg.com/news/artic...-curve-control [19] https://www.kitco.com/news/2021-02-1...-bad-news.html [20]https://moneyweek.com/investments/bo...-curve-control [21]https://www.bloomberg.com/news/artic...-curve-control [22] https://www.icmagroup.org/Regulatory...20SSA%20market. [23] https://ticdata.treasury.gov/Publish/mfh.txt [24] https://wolfstreet.com/2020/12/31/us...-slow-decline/ [25] https://www.adamseconomics.com/post/...breaking-point [26] https://www.adamseconomics.com/post/...-silver-market [27] https://www.adamseconomics.com/post/...e-manipulation [28] https://www.adamseconomics.com/post/...lver-moon-shot
[29] https://cdn.mises.org/Human%20Action_3.pdf

https://www.zerohedge.com/markets/fe...ops+to+zero%29

The Fed Will Need More Than Words To Keep The Bubble Inflated
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BY TYLER DURDEN
THURSDAY, MAR 04, 2021 - 18:20
Authored by Michael Maharrey via SchiffGold.com,

Bond yields spiked. The stock market threw a tantrum. Reuters analyst Dhara Ranasinghe called it “a tussle over borrowing costs.”

The Fed won round 1, thanks to a little help from the Aussies.
But even the mainstream seems to have noticed that this wrestling match isn’t over and the Fed may be forced to take real action soon.
As Ranasinghe put it, “Round Two, and perhaps even Round Three, are inevitable, and they may require policy action rather than just words.”
By policy action, they mean upping quantitative easing – exactly as Peter Schiff has predicted.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=0N6kaiZy

The bond market got clobbered on Friday. As prices fell, the yield on the 10-year Treasury pushed as high as 1.61% and the 30-year hit 2.4%. These rates aren’t high by historical standards, but Peter said it was one of the biggest interday moves in the bond market that he’s ever seen. Up to that point, stock markets hadn’t reacted much to rising interests rate, but on Friday, they sat up, took notice, and threw a tantrum. The Dow dropped some 480 points.
The bond market bloodbath on Friday is part of a larger trend. Yields have been pushing upward for weeks. Conventional wisdom tells us that this is due to a quicker than expected economic recovery and this may force the Fed to tighten monetary policy sooner than expected. This is precisely why we’ve seen the big selloff in gold. A lot of people actually believe the Fed is going to reverse course on its monetary policy.

But Fed officials have been working diligently to jawbone this notion away. Jerome Powell testified on Capitol Hill last week saying he doesn’t expect inflation to reach the 2% target for at least three years.

But Peter says there is a reality out there that nobody wants to acknowledge. Bond yields are not spiking because the economy is strong. They are spiking because of inflation – Powell’s assurances notwithstanding.

Bond yields are going up because there is a massive supply of bonds because we have massive deficits. And even though the Fed is buying a lot of bonds, they ain’t buying enough. So, those extra bonds, there’s no buyer, and so the price keeps falling.”

The reality is that talk isn’t going to be enough to keep a lid on rising interest rates. And this Reuters article reveals that at least some people out there in the mainstream get it too.

Reiterating such messages [that inflation isn’t a problem and loose monetary policy will remain in place for years], alongside interventions by smaller central banks such as Australia and South Korea, calmed bond markets. Bets on early-2023 Fed rate hikes have ebbed.”
Reuters mentioned Australia. The fact of the matter is the Reserve Bank of Australia stepped in and did the Fed’s dirty work this time. On Monday, the Aussie central bank announced plans to double its quantitative easing program.

After the big selloff Friday, stock markets rallied on Monday, with the Dow up better than 600 points. As Peter noted, very few people in the US mainstream financial media connected the rally with the RBA’s policy move.

Nobody was really talking about the fact that our rally was made in Australia. But it was. And the significance, I think, of what the Australian central bank did, is I think it created an implied put here in the US market. Because I think when traders looked at what the Reserve Bank of Australia did, they assumed that the Federal Reserve would ultimately do the same thing, which is exactly what I’ve been saying the entire time.”

The Reuters analyst seems to get this. Ranasinghe identifies the stock market bubble blown up by the Fed.
Central bank stimulus that crushed borrowing costs to below inflation has fed an equity bull run that has added $64 trillion to the value of global stocks since 2008. Higher yields would put that entire edifice at risk.”

Then Ranasinghe accurately observes that the Fed has consistently played the role of white knight, riding in to rescue the market when necessary.
The shifting power balance [between the markets and the Fed] became evident in 2013 when a market tantrum forced the Fed to backtrack on plans to start withdrawing stimulus. Another market revolt erupted in late 2018, egged on by then President Donald Trump. The Fed soon pivoted from raising rates to cutting them. So markets have seen this movie before.”

And Ranasighe understands that the Fed really can’t let interest rates rise when the entire economy is predicated on cheap money.
What happens in sovereign bond markets matters because higher yields here raise borrowing costs for companies and households. As capital flow slows, so does economic growth. And higher yields are harder to stomach in a world that has racked up an additional $70 trillion rise in debt since 2013.”

Given the realities, it’s not hard to predict what the Fed will do. The central bank will do exactly what Peter Schiff has been saying it will do. It will boost QE.

If the Australian central bank has already panicked and is increasing the size of its QE program, not to help the economy but to stop interest rates from rising, why wouldn’t the Federal Reserve do the same thing? After all, all of these central bankers are using the same playbook. So, I think what happened is now the markets are starting to realize that they don’t have to worry about a big increase in interest rates because if there is more significant upward pressure, if the bonds really start to fall, then the US Federal Reserve is going to do exactly what the Australian Reserve Bank did, and it is going to increase the size of its asset purchase program – QE – and is going to start buying more bonds to prevent bond prices from falling and to prevent interest rates from rising.”

The Fed could be put to the test sooner rather than later. Next week, the Fed will auction 3-year and 10-year bonds. The last debt sale saw lackluster demand and there’s no reason to think investors are going to suddenly be starving for US bonds. That could mean another bad day for the bond market and another spike in yields.

According to Reuters, ING Bank predicts the US Treasury will issue another $4 trillion in debt this year. That compares with $3.6 trillion in 2020. The Fed’s monthly purchases currently total $120 billion.

The math doesn’t add up, as a John Hancock analyst told Reuters.
As we do more stimulus, we will issue more US Treasuries, so if the Fed doesn’t increase quantitative easing they are in essence tapering.”
The Fed can’t taper. It can’t let interest rates spike. And words won’t be enough to hold interest rates down. The Fed is going to have to take action and that means more bond-buying.

https://www.zerohedge.com/markets/po...ops+to+zero%29

https://www.zerohedge.com/images/icons/print-icon.svg

Powell Plunges Markets Into "Disorder"

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BY TYLER DURDEN

THURSDAY, MAR 04, 2021 - 18:22
Fed Chair Powell's failure to deliver during his speech today - No hints at a 'Twist', refuses to speculate on repo issues, no pushback against recent bond vol, and no mention of SLR exemption - sparked chaos across all asset classes today with stocks, bonds, and gold puking as the dollar soared...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=UrEOImrS

Powell sparked the biggest sell program since October...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=qCohhTZ6
Source: Bloomberg

Or to put it another way...

Small Caps were the days biggest loser, puking over 5% from the intraday highs. Stocks rebounded after S&P found support at its 100DMA and unch for the year and Nasdaq reversed right at its 10% correction level and 100DMA...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=e5fk3iqM

Nasdaq entered correction (down 10%) and is in the red for 2021. The S&P also fell into the red but found support there...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=Tukxo0gZ
Source: Bloomberg

The Nasdaq fell below its 100DMA today and all the other majors fell below their 50DMA but found support at those levels...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=AOJtv9Hg

Energy stocks rallied on the day (as oil exploded higher) but tech wrecked and financials were hit (even with higher rates)...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=c8Ac2kFw
Source: Bloomberg

Hedge funds have really puked up their favorite holdings. After a solid February, March has been a bloodbath...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=ZDJH4Ijx
Source: Bloomberg

BUZZ - the social media sentiment ETF - tanked from its open...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=rCx3oOIb

TSLA tumbled to $600...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=yohJU3uA

ARKK sank hard - down 28% from the highs...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=8tRXsfqy

The collapse of momo stocks continued...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=o9QvBzQJ
Source: Bloomberg

Growth and value puked - this was not simply rate-related...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=6KQLDuUK
Source: Bloomberg

And suddenly, profitability (and not narratives) matter...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=FDDfQ87o
Source: Bloomberg

As IPOs and SPACs were clubbed like a baby seal into a bear market...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=E0o7Gv2U
Source: Bloomberg

VIX spiked to 32 intraday...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=n-WJQQsX

Credit markets had an ugly day with IG and HY spreads blowing out...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=9Q660TC3
Source: Bloomberg

Bonds were a bloodbath today after Powell's failure to deliver (2Y unch, 10Y +6bps)...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=SbhsxfpG
Source: Bloomberg

10Y yields spiked up to 1.55%... and stayed there...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=paK5Ligt
Source: Bloomberg

Real yields surged higher and dragged gold down...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=6fevR9Xo
Source: Bloomberg

The dollar shot higher as we suspect liquidity fears are rearing their ugly head, hitting its highest since November...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=qQBegMxl
Source: Bloomberg

Broad selling pressure spilled over into crypto with Bitcoin dumping back below $50k...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=eohTqtBK
Source: Bloomberg

Oil surged on surprise OPEC+ decision to not hike output...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=gI36ZQp_
And as oil prices surge, so $3.000 gas prices at the pump loom...

https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=jOQm2X14
Source: Bloomberg

PMs were pummeled...with gold back below $1700..
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=bRMYc3Sf

And silver tumbled below $26, erasing all the Reddit-Raiders' gains...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=zovvKjU5

Finally, we note that amid all of Powell's comments he said:
“I would be concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals.”

Well, judging by today's explosion in vol across every asset class, and financial conditions at their tightest since November...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=3Qs2W4s0
Source: Bloomberg

It's time to get back to work, Mr. Powell. It's pretty clear that's what the market is demanding... and with the market pricing in 118bps of rate-hikes.between the end of 2022 and the end of 2024...
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=PkzHluoh
Source: Bloomberg


We leave you with former Dallas Fed president Richard Fisher's comments:
"[The Fed] cannot live in fear that gee whiz the market is going to be unhappy that we are not giving them more monetary cocaine."

"Does The Fed really want to have a put every time the market gets nervous? ...Coming off all-time highs, does it make sense for The Fed to bail the markets out every single time... creating a trap?"

"The Fed has created this dependency and there's an entire generation of money-managers who weren't around in '74, '87, the end of the '90s, and even 2007-2009.. and have only seen a one-way street... of course they're nervous."
"The question is - do you want to feed that hunger? Keep applying that opioid of cheap and abundant money?"

"...but we have to consider, through a statement rather than an action, that we must wean the market off its dependency on a Fed put."
Those words were spoken almost exactly a year ago!

https://www.zerohedge.com/markets/10...ops+to+zero%29

10Y Treasury Hits A Stunning -4.25% In Repo As Yields Blow Out
https://zh-prod-1cc738ca-7d3b-4a72-b.../picture-5.jpg

BY TYLER DURDEN

THURSDAY, MAR 04, 2021 - 19:40

Last night we first pointed out something shocking: as a result of a massive wave of shorting in Treasurys in the past three days, the 10Y hit a record -4% in repo, an extremely rare event and one which occurs only when there is a dramatic shortage of collateral as a result of overshorting (think of it as very hard to borrow condition for stocks). What was even more amazing is that the repo rate was below the fails charge, which at least in theory is the absolute minimum that a 10Y rate can hit in repo. Effectively, it meant that an investor in the repo market lending money so others could short the 10Y ends up paying rather than getting paid. Needless to say, this is a clear breach of one of the most fundamental relationships in the repo market, where lenders of cash always get paid - however little - in order to make a more liquid and efficient market.

This stunning issue quickly escalated and this morning Bloomberg followed up on this critical topic:
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=oCSRGMY_

And with everyone suddenly obsessing with both the SLR and repo malfunction, that's why we said that during today's WSJ video conference event, Jerome Powell has to address i) the ongoing crunch in the repo market and ii) the fate of the SLR extension, as the two are closely tied - after all if the bond market is confident that there is capacity to soak up the trillions in reserves being released by the Fed as the Treasury drains the $1.5 trillion in cash held in the TGA account, many of the acute issues in the extremely illiquid Treasury market would go away.

Alas, for some bizarre reason Powell never got that question today... or perhaps he simply did not want to answer it and made it clear in advance. In any case, with everyone in the market expecting Powell to discuss the fate of the SLR, his failure to do so was one of the reasons why bond yields erupted shortly after 12pm, as uncertainty over the fate of the SLR - and by extension bank balance sheet capacity - has now grown exponentially (for those confused by all the SLR hoopla, please read this).

It's also why during the disappointing Powell address we said that we should brace for an even more dramatic move in repo:
Ok, fine, we were just a bit hyperbolic, but in retrospect we may not have been too far off. Here's why.

In his latest repo market commentary by Curvature's Scott Skyrm published after the Powell conference, the repo guru asked - rhetorically - "how low can Repo rates go in the 10 Year Note? Or, in the past, how low have 10 Year Repo rates gone? Extremely low 10 Year Note rates only occur during single-issues." That, Skyrm explained, is the period of time between when a new 10 Year Note was issued and its first reopening a month later. Which is true... however usually the single-issue repo crunch pushes the 10Y to -1%, at most -2% in repo. What we saw yesterday was unprecedented. Or rather, there was just one precedent... and it was during a market crash.

Skyrm said that from his own experience, what we call "extremely low" Repo rates is anything that's below -3.00% - which is below the Fail Charge right now. Since the beginning of 2018, the 10 Year Note traded below -3.00% only two other times: a more "solid" -3.50% from 6/10/20 to 6/12/20, and the only time there was an even lower, record low repo print of -5.75% was during the peak of the covid crash, on 3/13/20.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=GbFve3Nw

What is striking is that March 3, 2021 was not a crisis. Neither was March 4. And yet, as Skyrm says after hitting -4.00% on Wednesday, the 10Y dipped even further to -4.25% today.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=_j3zehNa

The good news is that after hitting a near record low in repo today, the 10Y stabilized modestly, rising to a still abnormal -1.00%, which may have been the result of today's announcement that the Treasury's 10Y reopening next week will be $38BN, which should relieve some of the single-issue pressure (it was below . But if there is more to the repo squeeze than just single-issue funding pressure, the 10Y will remain very special in repo for a long, long time.

Meanwhile, the shorting in the 10Y has now resumed, and after blowing out to 1.55% during Powell's catastrophic speech, the benchmark treasury was last seen trading north of 1.57%, and fast approaching last week's blowout level of 1.61%.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=WJP7fwUn

And while we wait for tomorrow's repo market data to see just how massive the latest shorting burst has been, one thing that is certain is that with Powell neither doing nor saying anything today because as the Fed Chair said there was nothing "abnormal" about the market, the same market will now quickly push the 10Y to a level Powell does find "abnormal" and forces him to launch YCC far sooner than if Powell had simply said something about the SLR today and eased some of the soaring market panic.

Digihost Technology Inc Symbol DGHI Shares Issued 40,073,661 Close 2021-03-04 C$ 3.32 Recent Sedar Documents
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Digihost doesn't say why share price is volatile


2021-03-05 07:41 ET - News Release

Mr. Michel Amar reports

DIGIHOST COMMENTS ON RECENT MARKET ACTIVITY
Digihost Technology Inc. is issuing this press release in response to recent market activity and the resulting volatility in its share price. Generally, the Company's policy is to not comment on its stock price or trading activity unless specifically required to do so by the regulators. However, given the recent volatility and the inquiries made by investors, the Company would like to confirm, and reassure the marketplace, that all material information about the Company's operations has been disclosed.

Michel Amar, the Company's CEO stated: "The fundamentals of our Company and its operations continue to be strong. Digihost is well capitalized and, with the exception of the non-current portion of premises leases, the Company continues to operate without any long-term commercial debt. These key attributes, coupled together with the recently reported Bitcoin balance of 219.72 held by the Company, puts Digihost in a position to consider and take advantage of new opportunities as they present themselves, including the expansion of its productive asset base of state-of-the-art next generation cryptocurrency miners; securing additional access to clean and sustainable low cost sources of energy, as and when the Company's operations expand; attracting and retaining best-in-class talent for our highly efficient Bitcoin mining operations; and, amongst other things, staying focused on creating long-term shareholder value."
The Company recently reported that during the shorter month of February 2021, a total of 35.02 Bitcoin ("BTC") were mined, whereas as during the previous month of January 2021, a total of 33.7 BTC were mined, representing an increase of approximately 4% month-over-month. The Company had further reported that during the same comparative period, its hashrate increased to approximately 189 Petahash at the end of February 2021, compared to 184 Petahash at the end of the preceding month.

Michel Amar continued to state: "The recent announcement of our increased Bitcoin output demonstrates the strength of our team and the efficiency of our Bitcoin mining infrastructure. Our vision for continued growth in the blockchain sector and cryptocurrency marketplace has not waivered and we remain focused on being a leader in this rapidly expanding sector. As CEO of the Company, I am committed to align myself with the goals and vision of our Company, which was recently demonstrated by my purchase of the Company's shares for proceeds of $3.344 million."

About Digihost Technology Inc.
Digihost Technology Inc. is a growth-oriented blockchain company primarily focused on Bitcoin mining. The Company's mining facility is located in Buffalo, N.Y., and is equipped with an 18.7MVA 115,000-kilovolt-ampere outdoor substation with an option to increase the power output to 42MVA. The Company is currently mining approximately 1.2 Bitcoins per day, subject to difficulty. Digihost's strategy is to focus on continually increasing its hashrate with a concurrent reduction in energy costs.

We seek Safe Harbor.

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