Powell Throws In the Towel

He has ripped off his hawk mask.  Powell is a chest thumping pigeon.  He cracked under the pressure from Trump and the stock market.  The Fed chairman has shown his true colors and that is a stock market sycophant.  He tried his best to fool the market into thinking he was a tough, inflation fighting bubble buster.  It doesn't have a shred of truth anymore.  He is a pansy, and has lost all credibility.  Going from a long way from neutral, when the SPX was above 2900, to just under neutral when the SPX was below 2700.  The Powell put is in play, and it has a much higher strike price than people think. 

The Fed is one and done now.  Forget the useless dot plot.  They have been totally wrong 90% of the time anyway.  There is no way the Fed gets to 3.00% Fed funds.  They have given the green light to stock speculators to drive stocks higher and they will be hands off.  What a luxury for this toppy market to have a slowing economy and an angry Trump! 

The next big event is the G20, and the most likely scenario is a bunch of happy talk with an agreement to cancel an increase in tariffs from 10% to 25%.  The market will be satisfied with the outcome, and that should be good enough to drive the SPX back towards 2780. 

I do expect a little pullback today ahead of G20 event, perhaps down to 2720, but it should be short term, as the bottom is only 4 days old, so at least another 4-5 trading days of runway higher for the bulls.  The paper napkin chartists will be all over the double bottom on the SPX chart and that should be enough to get a continuation next week.  I will sell longs at that point and look to get short.  This is not like 2015/2016.  The monetary conditions are much tighter and China is in a worse financial and economic position as they can't do a full blown fiscal stimulus with the yuan so weak.