The Dot Plot Dip

Ok, that didn't last for long.  The FOMC "hawkish" meeting took the SPX down from Tuesday June 15 close of 4246 to a June 18 close of 4166, an 80 point dip.  Those looking for a deeper dip, missed out.  The low happened to come in the Sunday overnight session, post opex, panicky hedgers and stop outs probably the main culprit for the overnight move.  

I have been sanguine about the stock market, expecting a grind higher, but even this quick burst off the overnight low and never looking back in a one way move on Monday caught me a bit off guard.  I was waiting to load up at the Monday cash open and the bounce back move had already started during European hours.   I was able to get a few fills overnight, but not a full position.  Strong markets like this SPX don't give you much time to buy on dips.  The pullbacks are shallow and brief.  

I really only see 2 scenarios for an end to this bull market.  

1) The Fed makes a hawkish pivot and drastically changes its reaction function, focusing more on keeping inflation under control and less on goosing the economy and jobs.  Causing Treasury yields to go noticeably higher.  Unlikely. 

2) A euphoric period of risk taking among institutions, causing a parabolic rise in the equity indices, >10% increase in a month.  That would be a flashing warning sign that we've reached the terminal point of this bubble and an end to the everything bubble.  Likely, but probably later in the year, not just yet.

There was a lot of speculation in the meme stocks, a sign of an imminent turn in the market, and we got that late last week.  The dip was so shallow and brief, I don't think it was enough of a reset or washout to provide an all clear sign to jump in to the SPX.  I am still waiting for a bit better of a buy signal to go in big on the long side.