Yellen is stepping down after concluding her final meeting as head of the FED. Her four years saw a strong rally for the stock market.
Yesterday saw the familiar dip buying frenzy that we've grown accustomed to throughout her reign as queen of the financial markets.
The early price action was setting up with a rather bearish tone, with the markets reversing overnight gains. A bear flag formation looked poised to come to fruition.
Yet throughout this 8+ year rally to record highs, these bearish patterns have just been bullish ones in disguise. Sure enough, buy the dip showed up late in the session.
The action continued to bump up against the flag overnight, before finally giving away again this morning.
The bears can't even get a bearish pattern to resolve with confidence in this market, which is why going short this market has been a mostly fruitless endevour.
Yet here we are. A day after Yellen. Futures are falling. The bear flag resolving... the hard way... yet bears are still on the lookout for that massive reversal, that relentless dip buy.
That furious buying frenzy that follows every attempt at long lasting downside. Does Yellen's departure signal an end to the dip buying market mentality? Was yesterdays late and now short lived price recovery a final fair well?
I don't think this market has topped yet. But odds are in the bears favor over the short run. We are looking at possible tops and bearish patterns. We are seeing more and more new lows hit. New highs? yeah they have collapsed.
Many have been calling a top for many many many years.
The market continues to defy these calls. But we could be looking at least at a short term top.
Earnings continue to impress, rubber stamping the recent rally, and confirming the upside we've seen over the last two years.
It has been nothing short of a brilliant rally. But is the market now expecting even more? And is that even more not good enough?
The month of February looks to put in a red candle early. Will it follow the tremendous trend of positive months? Or will this weakness finally trigger the long awaited correction?
Earnings tonight will certainly have a hand in answering that question with the likes of $AMZN and $AAPL set to report.
See you in the chat room!