Post Yellen = Confusion

Yellen seems to me to be mastering the art of saying things so that everyone can come away hearing what they wanted to hear.

For those concerned about the Fed leaving interest rates too low for too long, she adopted a hawkish view on the economy, particularly when it comes to the payrolls. For those thinking that any Fed rate hike would send the Dollar soaring, pressuring Emerging Markets as well as equity markets both here domestically and elsewhere, she sounded the theme of interest rates remaining low for a long time. Thus, if the Fed were to hike sooner rather than later, no need to worry because it would not signal the beginning of a rapid series of rate hikes.

Initially, everyone seemed happy – Utility stocks moved higher but so did banking stocks/financials. By the end of the day, the utility sector had sold off and banks faded somewhat.Emerging Markets which initially were more than happy, then faded sharply before the closing bell rang.

The Dollar, which had initially moved higher moments after the speech, then reversed and sold off, managed to reverse its reversal and ended higher on the day.

So far the 94 level in the USDX seems pretty solid. Now we need to see if we are going to get more upside. The next level that offers some minor resistance is near 96 and then again at 96.50. Stronger resistance is up near 97.00-97.25.

The same sort of confusion that gripped most major markets was seen in the gold market which was all over the place on Friday.

Look at this hourly chart of gold.. talk about whipsawing back and forth! You had a $25 range within the span of an hour before the market finally succumbed to the move higher in the US Dollar. Look at the volume spike – an awful lot of people got hurt going either direction on Friday.