Welcome back to the Bore. Home of the 6 point intraday range, tiny volume, and green markets. And of course both bonds and stocks up. It is almost like the apocalypse if you see both bonds and stocks down. It is normal now if you see them both up. The stock market loves low interest rates, so when bonds are rallying, and stocks are rallying, that is about as bullish as you can get.
The tropical storm has passed, and its blue skies again. I would not fight this rally, especially coming off the capitulation last Thursday. The hedge funds will be scampering to add back long exposure now that the storm has passed, and there is FOMO: fear of missing out.
With the Bore back in place, there will be much less trading to do. Expecting a grind higher for the next few days. Blog posts will be sparse during the Bore. When we get some action again, will post more often.
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3 comments:
It appears as if this short covering fling has had its day. The R2K couldn't even hit the 50. Looks like probably a key reversal day. So much for the Bore.
For the past few years, SPX dropped up to 10% in response to each QE ending. Any thoughts that whether this pattern will recur this time? Or the 5% drop early this month IS the correction? Thx
I don't think the pattern will recur. At least not right away. I expect a start of a period of choppiness which eventually leads to a bear market in 2015. Do think that this past 5% correction was the flush out that weeds out the weak hands and now we are free to grind higher to above 2000.
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