Let see if I’ll be right or wrong. Two big elephants just entered the room:

  • Bucky is cracky, just broke support and is trading at 73.72
  • The 30-year mortgage rate is reported to break the October heights

It seems to me that those are problems that Feds are forced to address. In the last two days they are pumping like mad and the reason is simple – the Treasury dept is on the market with a huge tin cup to borrow $46 bln.

Tomorrow they will fill the tin cup for whatever price it takes and then next week Feds will be forced to attack the inflation expectations. I guess the way to do that is to drain funds and tank the markets, both equity and commodity. This Fed already demonstrated back in January that they can throw the stock market under train if they need to. Now they need to.