Live Trading System Signals on September 15, 2022 - Federal Reserve Increases Balance Sheet


I was shocked to see the Federal Reserve's Balance sheet go up by $10 Billion this week. The Fed just released it's balance sheet.


https://fred.stlouisfed.org/series/WALCL


It increased by $10 billion this week and is up $6.5 billion on the month. The Federal Reserve has committed to reducing its balance sheet by $95 billion per month starting this month but with half a month to go, the balance sheet is trending higher. I guess they will unwind $100 billion in the next two weeks?


The excess liquidity tends to favor the bulls and the prop up price action we see in the market and creates a distorted bias in true pricing. This is one of the reasons we spend so much time on it. Our preference is the truth without the stimulus.


The market was in a choppy contentious downtrend with two down days in a row after equity peaks on Tuesday's CPI. Two strategies were hit with stop running price action. We were 1 for 4 on the Nasdaq today (and 1 for 9 the last two days) and 1 for 2 on the S&P as the market is contentious and in denial when realizing lower prices while also trying to support 3900 in the S&P and 12,000 in the Nasdaq with the excess liquidity offered by the Federal Reserve.


The prop up has come in the last 30 minutes the last two days.


I think the market can gap down below those support levels of 3900 and 12,000 after trying to hold those levels the last two days. They are psychological levels with real value at much lower levels in my opinion.


We are flat at the end of the day and are ready to be wrong and trade it either way in real time depending on the trading systems. We are looking forward to Friday's trade as Friday's have been a good trade day of the week.


The 200K Portfolio was down -$2,100 and the 50K Portfolio was down -$525.


Ever since Labor Day the market seems to be more difficult to trade. This happened for a brief period of time in June, right after Memorial Day, although the post Memorial Day trade was much more challenging.

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