It is puzzling to me how there is so much talk of taper, yet, hardly anyone expects the taper to happen at this meeting. The consensus got throttled with the Fed no taper announcement on September, in particular, the ES and Treasury bond shorts. So I am betting that there are almost no fast money shorts going into this meeting, in ES or ZN / ZB. Fool me once, shame on you, fool me twice, shame on me.
Well, everyone is not going to be fooled this time, so the vast majority expect no taper, and I am one of that majority. However, I don't expect much of a pop in stocks on that news, because it is pretty much consensus. In fact, I expect a small pop, and a vigorous selloff going all the way into triple witching Friday. So I would be a seller on any pop that comes right after the no taper announcement. I don't expect any pops on the no taper news to last for more than an hour.
As I have said before, the Fed has always acted more dovish than consensus. They sometimes talk tough, but they NEVER act tough without a 100% telegraph of that tough action.
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The tell was Monday's open off of the reversal Sunday night.
Good call MO. You think we go higher now from here? Seems correction quite shallow but does look very bullish.
I think we can make a slightly higher high, perhaps another 10 S&P points, but after that, I expect us to selloff in January once 10 year bond yields go toward 3%.
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