Yellen Gives Bulls What They Want

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 NO RATE HIKE
(I’m back in the turret briefly, but my hands are failing me limiting my typing, so this report is shortened.)


There’s a lot of spin (um, lying?) going on with the Fed’s announcement Wednesday.
 
It’s consistent with past comments and runs as follows:

Consumer Confidence has improved—no it hasn’t.
 
Economic Growth is growing at “moderate” pace—not really unless you consider 1% moderate.
 
The strong dollar has restricted economic growth—this has been the mantra for past two years, Retail Sales, Industrial Production and so forth remain weak.
 
Oil prices are rebounding has prices increased—that’s possibly true but the category is still weak.
 
Employment is expanding as is participation—most new jobs part-time or in the low paying services sectors, this is BS.
 
Over Seas Economic weakness has little effect on our projections—seriously?
 
Financial market (stock markets) are doing well fanning the flames to heat up investor confidence—markets are still rallying based on corporate buybacks. One thing to keep in mind is that this creates a lot of debt.
 
 
And, so the psychological manipulation goes.

Just remember gold rallied sharply which means a green from the Fed keeping interest rates low.

So, what is the current rally based on? Earnings? No. Better economic data. No. For now it’s zero interest rates forever which allows cheat debt for stock buyback.

That said, you must understand the Yellen doesn’t want to raise rates before the election this fall. This is part of Obama’s legacy after all. If Trump should be elected, she’ll raise interest rates, and if markets decline he’ll get the blame. Petty politics? Sure, that’s the way Washington works.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red).

Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

3-16-2016 2-18-02 PM


Volume was modest and breadth per the WSJ was positive.

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3-16-2016 2-29-53 PM

12-17-2015 9-04-44 PM Chart of the Day
 
 
 
3-16-2016 3-15-44 PM gld


Charts of the Day


  • SPY 5 MINUTE

    SPY 5 MINUTE


  • SPX DAILY

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  • SPX WEEKLY

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  • INDU DAILY

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  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • NYMO DAILY

    NYMO DAILY
    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.



  • NYSI DAILY

    NYSI DAILY
    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.

  • VIX WEEKLY

    VIX WEEKLY
    The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation has changed due to a variety of new factors including HFTs, new VIX linked ETPs and a multitude of new products to leverage trading and change or obscure prior VIX relevance.


 
















My bet would be the current market rally was based on inside information some thought, or were told would happen.

Frankly it would be naïve to think otherwise. In the case, and as I’ve been saying lo these many months, for this trend to be valid, the news must follow the market’s trend.

And so it did this day.

Today’s data, and all the data since January 1st hasn’t been positive. Also earning are estimated to fall sharply. The only mounting evidence of a rally is the ongoing debt fueled corporate buybacks.

This is what the Fed has achieved thus far.

Let’s see what happens. 

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