In Today’s Masters in Trading: Live Over the next four months, the stock market won't be driven by earnings reports, inflation headlines, or Fed speeches. It'll be driven by something almost nobody is watching. A singular shift happening in the plumbing of the financial system itself. For the last five years, the Fed loaded up its balance sheet with bonds and other assets to shore up the economy. Today, that policy has flipped to quantitative tightening (QT), which I covered in detail right here. The Fed is aggressively shrinking its balance sheet as I write this. But here's the twist: Rather than creating the effect you'd expect (less liquidity, higher rates), the Fed's pivot is actually priming the pump for a liquidity boom across the broader markets. For years, institutional cash was parked in something called the Reverse Repo Facility – or RRP. Money market funds and large institutions parked cash at the Fed overnight and earned interest. That money wasn't circulating. It wasn't buying stocks. It was just sitting there, idle. At its peak, almost $2.5 trillion sat with the RRP. It wasn't fuel for the market. It was a shock absorber. But now those dollars are flowing out of RRP. Liquidity hasn't been destroyed. It's simply moving to other sectors of the market. The Fed is still absorbing most of the supply in the front end of the market. That means money can move as much of that short-term funding stress stays contained. Now the downstream effect for traders is key here. If the Fed continues stabilizing the front end of the market – and if bond volatility remains contained – the next four months could spark a whole new bullish run in the broader market. Any weakness from here, and the opposite could be true as well. This isn't a small call. It's one of the biggest I've made in the history of Masters in Trading. In today's episode of Masters in Trading LIVE at 11 AM EST, I'm explaining exactly what I see happening from here and the key catalysts that will guide our portfolio as we approach 2026. P.S. Every bull market has a moment when the story starts to crack – and TradeSmith CEO Keith Kaplan argues we’re inching toward one now. Keith is drawing a powerful parallel between the dot-com era and today’s AI-driven market. In 2000, Cisco looked unstoppable…until it plunged 80% as the market buckled under extreme concentration. Fast forward to today, when the top 10 stocks now make up nearly 35% of the entire S&P, and Nvidia and Google alone have driven roughly a third of its gains. Keith calls this the classic setup for a sudden “tipping point.” That’s why TradeSmith built a new early-warning system designed to detect abnormal weakness in a stock before a big drop hits. And it’s why Keith is joining forces with market legend Marc Chaikin for the Tipping Point 2026 Event on Tuesday, December 16 at 10 a.m. Eastern. Make sure you sign up and gain Keith’s insights about the next major market cycle taking shape right now. 
| Recommended Link | | | | 127 companies and sovereign nations are investing vast sums of money in America. But few people understand the radical implications of this $11.3 trillion economic shift. Eric Fry is one of them. During the American Dream 2.0 Summit, he revealed the best place to put your money right now. The replay is now live. Click here to watch it. |  | |
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