So sayeth bulls wanting who revel in weak economic news means more sugar from Mama Yellen. It’s just the way those who control the tape want you to understand. Orwellian thoughts and policies dominate the tape now.
Let’s see, we have three days of rallies now, which in itself, is unique given previous volatile back and forth daily action. It’s not crazy to suggest that some insiders had the Fed Minutes leaked to them thus verifying the news still follows the trend. After all, the other shoe that dropped Wednesday was bullish and dovish Fed Minutes.
How far can this rally run? As I’ve been saying from S&P 500 Index 1902 to 1956. We’re now back near levels seen January 29th.
One of the keys to the rally beyond today’s Orwellian “bad news is good” logic occurred with a rise in oil prices. This was linked to Russia and the Saudis agreeing in principle to freeze oil production as current levels. Of course “current levels” means “no cut” which isn’t bullish at all. Further Iran thought that another good idea, at least for those parties, but it wouldn’t apply to them. Bullish? Hardly.
But, we must remember the tape action should remain truth in an Orwellian way. Even as Joseph Goebbels suggested, “if you repeat a lie often enough, it becomes truth”.
And so, bad news is good.
Industrial Production rose monthly but annually fell for third consecutive annual decline; Housing Starts fell to and Permits dropped second month in a row. And, in other news, Turkey army barracks in Ankara were car-bombed probably confirming the country will invade Syria. No worries for bulls.
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).
Volume once again was relatively light but grew some into the close. Breadth per the WSJ was positive.
Leave A Comment