Trindy, this looks almost like a climax...but i agree, we can't know how far this will go, and the propaganda machinery is cranked up full throttle ("no more hikes, or one at most"). the overall put/call ratio almost made an all time low today...only 0,02 above one in fact. this is bear capitulation on a grand scale...and too much consensus for my taste. that said, the sentiment indicators are not what they used to be. the extreme levels have to be re-defined due to the moral hazard introduced by Greenjeans.
we also have the month-end/beginning effect to consider...mark-ups of large mutual fund positions, and deployment of 401k money.
i hear that the rally in t-bonds is seen as bullish for stocks...i think that's a misperception. the credit markets are in panic conditions, money is fleeing spread product and goes into t-bonds.
all that said, i'm always willing to give a strong move the benefit of the doubt...
regards,
hb
PS re. Greenspan and the election, as i have said before, all depends on how the inflation data look. if they are strong enough to indicate more hikes are warranted, he will have to hike to appear impartial. so the election does NOT mean that the Fed can not hike rates further. i also happen to think that the current 6,5% Fed funds rate won't accomplish much...consumer confidence is almost back at record levels. what's 6,5% with inflation running at an annualized 3,7% according to the flawed BLS data? nothing... |
