US Federal Reserve

Stocks will likely rally this week for the simple reason that it is options expiration week.

The Fed almost always gives Wall Street extra money to play around with during options expiration.

·      On average the Fed expands its balance sheet by $9.1 billion during options expiration weeks.

·      During non-options expiration weeks, the Fed contracts its balance sheet by an average of $2.5 billion.

Below is a table of the changes in the Fed’s balance sheet. Options expiration weeks are gray.

Just days after The Fed admitted "we got it wrong" on the "unequivocally good" low oil prices, BP has joined a long list of energy entities slashing jobs. The oil company will cut 4,000 jobs in exploration and production because of toughening market conditions "we need to take specific steps to ensure our business remains competitive and robust."

As Fed's Williams recently admitted:

Authored by Senator Rand Paul and Mark Spitznagel, originally posted at Time.com,

The country deserves to understand the extent of its balance sheet

On Jan. 12, Congress is scheduled to vote on the “Audit the Fed” legislation (H.R. 24/S. 264), which, if passed, would bring to an end to the Federal Reserve’s unchecked—and even arguably unconstitutional—power in the financial markets and the economy.

It's not the economy (or fundamentals), stupid - It's The Fed!

So we had a rate-hike, and...surprise - markets puked

Source: NorthmanTrader.com

Still think anything other than The Fed matters?

The S&P 500 has just caught back down almost perfectly to The Fed's balance-sheet-implied level...

While equities continues to plunge in what increasingly appears to be a straight line (sorry JPM) with the occasional mini short covering rally, and are fast approaching the August 24 ETFlash crash lows, the Treasury complex has been relatively quiet. While the lack of recent buying interest may be explained with concerns over ongoing reserve liquidations by the likes of China and Saudi Arabia, if Citigroup is right, that may be about to change.