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The Dow rallies 250 points on Yellen's speech, but is it real? Maybe not.
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2014 Dec 18, 12:33am 553 views 1 comment
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2014 Dec 18, 2:02am
Odds are heavily against technically speaking starting with the gap up and tomorrow being Friday where some profit taking and more short positions enter maybe the dish served to the retail investors.
That's 1 of the reasons I mentioned it maybe a good idea to stand down until next week more so till Tuesday then Monday. S&P needs to stay above 2000+/- to give a rally beyond a retest performance and close above 2057+/- to become neutral so to speak. The odds are not in it's favor.
Based on neg. correlation of other opposing trades and their technical's S&P "price" is vulnerable as pro money buys it up and sells it into that buying, definitely a time retail investors stand down in which ever way that best suits capitol preservation.
DXY has much better odds of breaking new highs then the equities. If and when DXY stabilizes above 89.62 then I suspect the convergence to re-enter between USD and US equities.
"Price" is not in a good place for sound decision making.
Yesterday’s Fed-speak rally has the folks at CNBC all a-flutter this morning with hopeful anticipation of a Christmas rally just like the old days. And while that could very well happen (irrational exuberance is still in strong supply), nothing actually changed between the close of business Tuesday night and Janet Yellen’s dovish speech Wednesday afternoon.
I used last week’s Dow Jones Industrials update to make the case for a possible Santa Clause rally, i.e., a rally to still new highs. But the caveat was that it was an unlikely alternate possibility. Today will be crucial to knowing if that possibility will come to fruition. As I write this, the Dow is up almost 250 points. It would seem like a no-brainer to call the rally underway. But… not so fast.
http://www.globaldeflationnews.com/the-fedral-reserve-adds-patience-to-its-lexicon-the-stock-market-apparently-thinks-thats-a-good-thing/