The Primary Dealer Scam Continues

ZeroHedge has been on the vanguard of tracking the scam that is POMO or monetization of the debt with primary dealers taking nearly no risk as they flip newly issued treasuries to the Fed in two weeks. There's not a whole lot of risk in two weeks and they sell these issues at a premium to the fed.

Here are the results from today's POMO from ZH

Note the submitted:accepted ratio is below the median of 4.1x meaning the PD's came out of this one with some cash that usually ends up in the market that same day. After all, its risk free, free money, why not invest it in risk assets, you have NOTHING to lose?

Here's the market update...

DIA 1 min negative divergence..

DIA slight 5 min negative divergence

IWM 1 min negative divergence and also 1 of 2 (the QQQQ being the other) that showed a heavy price/volume relationship leaning toward overbought yesterday. See earlier post on Price Volume Relationships.

IWM 5 min just starting a negative divergence-with nearly a 2% gain, this could very well put in that overbought indication that we saw it leaning toward yesterday.

QQQQ 1 min (the other P/V relationship leaning overbought yesterday) with a negative 1 min divergence. We "could be seeing selling short here.

Q's 5 min still positive from yesterday's late afternoon positive divergence, I warned that it would continue at least through the early part of today.

The SPY was mixed in the P/V relationship, but the 1 min is negative and price is lateral. We'll see if there's improvement here which could indicate the PD's coming into the market with their new fresh and free Fed greenbacks.

If you remember yesterday in the afternoon we saw a positive divergence developing-seen here in white, since it was so late in the afternoon I suggested it would carry over through today, which has happened thus far. there's also a leading positive on the 5 min, however, things can and do change very fast.