How fitting it was that 10 weeks into the year these 2 benchmark indices saw “green” YTD for the first time on St Patrick’s Day, toward the end of a week that feels very much like Spring.
Friday, markets have picked up where they left off on Thursday. Ninety minutes in the DJIA and S&P 500 on a glide path through the psychological resistance of 2015’s year end close.
Keep in mind that today is a Quadruple expiration as well as a rebalancing day for all S&P indices.
I’ll spare us the details, but simply, we had very heavy volumes on the opening and we’ll see at least that much of a volume spike in the last 5 minutes of the day.
The real catalyst for the markets unrelenting push toward erasing all of the carnage from the first 6 weeks of the year came Wednesday from the FOMC policy statement and press conference.
Particularly during the Yellen presser I had the distinct impression she’d recently taken an online course from the Mario Draghi School of Market Persuasion for Central Bankers.
FED Chair Janet Yellen didn’t quite say “whatever it takes”, but her comments on inflation were tantamount to dropping a Shot of Baileys into a Guinness for every Hedge Fund and Portfolio Manager in the Bar.
Keep in mind that a mere 6 weeks ago they were upping the dosage on their Prozac, while running calculations on how quickly they could close their current fund and open a new one with a hurdle rate they could see without a telescope.
DJIA and S&P 500 on a Glide Path to Green
But seriously, back to inflation and the FED. Yellen basically said……“Inflation?” “Smoke ‘em if you’ve got ‘em!!” “and don’t pay too much attention to that 2% target we’ve been transfixed with for the last few years” “Don’t you remember when we had that 6.5% unemployment target?” LOL!!
“We went through that a few years ago like a hot knife through butter!!” Everyone knows that rule #1 at the FED is Never Act too soon and risk having to reverse course.
We might be setting a new record for most "experts" twisted by a 1 day move in the market today
— Timothy Anderson (@TJAnderson1) March 10, 2016
This of course means the FED will let inflation easily overshoot the 2% target range they’ve lectured us on for years. They have a decade’s long history of waiting to change policy for so long until there’s so much pent up inertia in force that they are prone to over react.
Never Take Away the Punch Bowl until the last reveler has left the Party!
“Another Round of Irish Car Bombs for Everyone!!