Yellen Says What Markets Wanted To Hear
| Sep 18, 2014 12:39AM ET
Ms. Yellen made sure she spoke the words the market wanted to hear. Keeping rates low is what the market wants, and keeping rates low is what the market will get. She won't do anything she knows will hurt the market, because she uses the market to keep her job safe. If she lets the market fall hard, then she's allowing the economy to slip, since the market is keeping the economy higher. Repeat after me. The Fed’s job description is as follows: you will do whatever it takes to keep Wall Street rocking. Good luck! That's her job in a nutshell folks. Nothing more and nothing less. She's all about 401K's and funds doing well. As long as she's doing her job here, it's going to be very hard for the market to fall precipitously. That's even with froth still out of control week after week.
After she spoke the market rose and then fell fairly hard. It then advanced hard again, only to pull back again. Lots of indecision. The handle is still the only thing we know about with certainty. We tested the old high on the S&P 500 at 2011, with a 2010 print, and then things fell fairly hard. In the end we're still nowhere. Still meandering in the back and forth handle, thus, keep it light until we get resolution one way or the other. There's no resolution here for sure. Hope, but hope isn't a breakout if you're bullish. See the close over 2011 with some force and then adjust accordingly. Nothing to adjust to at this moment in time. Same old for now.
The bull-bear spread is down to an unacceptable 37.3%. It's better than being over 43%, such as we were a week ago, but it's still not a healthy number for the bulls, therefore I'll say it again. At any time, and without provocation, the market can get smoked to the down side. It's not showing that at all at this time but the possibility always exists when froth is very high, especially for as long as it has been. It's nasty when you're over 35% for months at a time not to mention half of that time being over 40%. We even touched twenty-seven year lows in terms of bears. No matter how good the pattern looks, you have to recognize the risk involved. Just when you let your guard down you can take a very nasty hit for no reason. Don't let your guard down for a moment. Keep stops tight. Don't chase froth. Do what feels right to you, of course, but that's how I would be proceeding from here until things calm down in time. Froth is still a major headache even though we at least got a drop of relief this past week.
Get The News You Want
There’s nothing much more to add. A close over 2011 gets you more bullish. If and when we ever lose the 50's, which is along way from here, you get more bearish. In between you should continue to expect more whipsaw. Today we saw a disappointing close. We went from just about breaking out to a strong late push down. The market received all it could want today and yet failed at the breakout. See the breakout and then play it and not before. Day to day is still the way here.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.