After yesterdays rate cut from the FED and hint of restarting QE... what's next? Where does the market head from here?
Yesterdays rate cut was widely expected. And it began as a sell the news event. Until Powell mentioned the possibility of restarting QE. The market liked that idea and reversed course closing the day ever so slightly higher.
The Central Banks are going to do everything they can to keep this expansion going. And as long as they plan on keeping this expansion going, stock prices will continue to head higher. You can cry, bitch, and moan all you want about the Central Banks. But they've been telling year after year they are going to keep greasing the gears.
Cheap money is here to stay. And yesterday it got a little cheaper. Throw some QE back in the mix and you have the makings of a move to key resistance over the short term.
The rubber will meet the road again. And it will be real interesting to see what happens when we hit the 'mega phone' topping formation resistance yet again. Does a big failure await?
I remain in the bullish camp. I've said it for years. I don't like what the FED has done. Good, honest savers continue to get screwed in a big way. Retirements have been cancelled or pushed back because of low interest rates. However you can cry all you want, but using your hatred of current policy as a reason to short stocks.. over and over and over and over again... well unlike the honest savers out there you are getting what you deserve.
As such, this giant mega phone top will likely be another bear tombstone 6+12 months from now. Thats been the trend right? Up. And with Central Banks around the globe pushing their feet back down on the gas pedal the question is.. why fight it again?
With that being said I i think there is a good chance we break out of this megaphone over the short term. Which sets the course up for SPX 3100.