According to the stock market manual that I received upon passing my series 7 exam many years ago, markets should rally today. About an hour ago, all of the elements were present for a rally. Oil was higher. Gold was lower. The number one worry of the market, DB, was up 13%. And, treasuries were lower and equity futures were sharply higher.
Let’s review how things look now.
Oil is down 1.5%
Gold is down 0.6%
DB is up 5.3%
TLT is up 0.22%
And the NASDAQ is higher by 50.
Let’s be clear: the market wants to rally. We need to see the animal spirits displayed on Wall. But things have moderated a bit. Should the market fear Yellen’s comments, due to begin at 10am, this rally might unravel and losses will be abundant.
I am leaning towards bullish. I am 33% allocated in SPY, 25% TLT, the rest cash. I have a mandate to purchase more SPY today, but will wait until after Yellen’s comments to do so.
By the way, if you haven’t see the ads festooned all over the site, we are doing free trials for Exodus this week. Join us.
If you enjoy the content at iBankCoin, please follow us on Twitter
Within the context of reasonable expectations the Fed Statement was pretty dovish and the first step toward not increasing rates again and starting to lean the other way.
Maybe it will take the market a bit to digest, maybe it has been digested already and will be puked up shortly, but I cannot see how this statement is a letdown.
She checked every box: Mentioned the renminbi, mentioned that the dollar is too high [multiple times], she even mentioned that the selloff in stocks has created an environment where their objectives might become threatened.
That’s very close to saying that when stocks go down they have to ease.
Thank you for your time.
Market doesn’t want to rally….Yellen is not going to spoon feed a concise statement.