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With each FOMC press conference bull session, Jaysus H. Powell reminds me more and more of the Wizard of Oz.
If you want to retain your sanity, as well as profit from all the lever pulling, smoke and mirrors, by gosh, ignore the bastard and just pay attention to the two facts that matter- supply of and demand for investment securities. I’ll help you with that with the data, charts, and straight talk I post over at Liquidity Trader. Indeed, I’ll have more to say later on about what Jaysus said yesterday.
So, yesterday, Jaysus mounted the altar of the Fed Temple to preach his sermon. It was the usual double talk, bloviation, and prevarication. It’s a sideshow designed to massage, manipulate, and soothe, Wall Street’s unwashed masses of professional traders into doing just what the Fed wants. First they wring their hands and gnash their teeth, but then shout Halleleujah!
I’ll have more to say about this a bit later. But you can cue Leonard Cohen for the time being.
Now for the business at hand, today’s charts, and what the market is more likely to do today.
First of all, we merely need to look at recent history, with Rule Number Two in mind. The trend is your friend.
Then there’s the fact that after every FOMC day comes Fed Resubstantiation Day. This is the day the assembled priests of the Temple lead the masses in their responsive reading to the FOMC statement in homage to Rule Number One: Don’t fight the Fed. Hosanna!
With that in mind, as we review the hourly chart of the ES fucutures we see a bunch of crisscrossing action that bears a striking resemblance to a head and shoulders top pattern over the past few days. It gives the bears some hope, but alas, a false hope, I believe. The truth will be told as the futures make their attempt to clear a succession of resistance lines beginning around 4410, then 4415, and 4425.
Now, my gut, well fortified by a bloom of acidophilus and other obscure bacteria that result from a heavy diet of Polish cuisine, says no breakout today.
But really I don’t know. If I were a day trader, I’d be inclined to fade the edges of this range, with loosely placed stops to allow for some play, if they break out instead of reversing. If I were a swing trader, I’d prefer to just take a nap or go for a swim.
Or watch the sea level rise out in the Hamptons. My god, what will the gazillionaires do when old Neptune takes their billion dollar mansions.
The good news is that the climate trend is my friend. My house in Florida, which is currently 5 miles from the beach, will soon be within walking distance. So I’ll get underlying value “growth” (housing prices don’t inflate, they “grow” according to economists and the media), and I’ll get the increase in value deriving from the rising sea level. At least for a few years.
It’s good to plan ahead for these things.
But timing is everything, of course. Because if you miss the top, not only will your mortgage be under water, but your property will be too.
Meanwhile, big picture stuff.
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