The chart has the key points:
1: Eurodollar bottom out.
2: S&P Exhibits topping behavior
3: EuroDollar has a powerful breakout of the Ribbon. and S&P Diverge.
4: S&P Tests the bottom of the ribbon and finally breaks through and bottoms out
The Purple Vertical Lines are where the eurodollar future price action first reaches the 90 (in black). Prior to that the market tops out which is one reason I have been posting so bearishly over the last couple of months.
I continue to read up on the euro-dollar and I think I found the most important sentence that for some reason didn't stick out as much as it should have the first time I read it.
>The fact that the eurodollar market is relatively free of regulation means such deposits can pay higher interest. Their offshore location makes them subject to political and economic risk in the country of their domicile; however, most branches where the deposits are housed are in very stable locations. https://www.investopedia.com/terms/e/eur...
So the value of the eurodollar, or unregulated dollars, is going up while the repo markets continue to seize, or would seize up if not for the excess liquidity ("not QE4") provided by the . Interestingly, there is a massive green weekly candle on the weekly chart on the 3M three months to the week before the repo markets seize up. All of the other reasons put forward about why the repo markets had a massive spike in interest seem uncompelling to what is happening in the unregulated dollar market.