The Market Presents The Camel Dance Competition

U.S. Army Camel Corps.

The scene in the photo depicts a soldier, apparently leading the charge, somewhere in the Southwest, USA, whilst atop a camel. 

I find the idea of a camel as mode of military transport fascinating.

In 1855, under the direction of then-Secretary of War Jefferson Davis, Congress appropriated $30,000 for “the purchase and importation of camels and dromedaries to be employed for military purposes.”

75 camels were bought and stationed in central Texas.

Jerome Powell, leading today’s market charge, rode in for his first press conference, apparently whilst sitting atop what we have come to consider a foreign animal-outspokenness about raising interest rates.

Powell said the Fed plans to be more aggressive with the rates and a tightening policy. He cites confidence in the labor market and global strength.

How does the Fed Chairman’s optimism, turn into investor pessimism?

Although analysts interpreted his words as “middle of the road,” many others found them to be hawkish.

Like a General on a camel, I see his stated intentions and views of the economy a bit foreign compared to the careful comments made by Janet Yellen during her term.

Hence, the rally that we wrote needed to confirm, especially in some of the Modern Family sectors, came to a screeching halt.

Yesterday, I did a piece on the TLT chart. The gist was that rising rates looks like it is in its infancy as far as a trend goes, and that could result in something less desirable than economic expansion.

The TLTs, already beneath critical long-term support, reflected the Fed’s intentions.

Today, TLT’s declined further.

The key in the Modern Family and how they mirror investor sentiment is typically on the back of Transportation (the movement of goods) and often times in Biotechnology (IBB), as that’s where speculators show up or not.

Last week we looked at trading ranges and phases.

Yesterday, Transportation (IYT) went into an unconfirmed bullish phase, closing over the 50 DMA at 194.