There was a big accident on the highway I use to get home so I am way late and short on time. Not that anything interesting happened today anyways.....
Long See-Saws and Rubber Bands
First off lets give credit where credit is due. Josh Brown of The Reformed Broker fame has been making calls that would be helpful to listen to. From going to cash last Monday to suggesting a Face-Ripper rally would happen, it's all working out. The Face-Ripping theme has exploded all over the place, some where put in mind of this Oscar winning film:
The FED signaled today that they will never raise rates ever again. This was new news I guess, but you have been reading that here for years. Low rates are a structural necessity of our "new" economy, there will be no going back.
Markets opened way up, about crashed lower, then rallied to new daily highs. It was pure mania all around.
All time low yields on the US 10 year are suggesting an economy that is going to further slow.
Markets are so volatile right now only people sitting at a trading station can play this market. If we are in for a multi day rally here, key levels to watch will be S&P 500 at first 1180 (probably bust that at the open) and then a test at 1200. Fast chart below:
The 10 year and the FED declaring no end in sight for their accommodating stance implies real weakness going forward. Maybe that has been priced in here. Maybe not. For me I am still waiting for some stabilization here, a bit higher, or a bit lower to get involved. If I had to make a call I would say today was bears and shorts getting out while the getting was good and a lack of pressure on markets made them explode higher. Not exactly a trend situation.
Have a good night.