The S&P 500 has broken out through the resistance on comments from Janet Yellen. I was not expecting this and it does not make any sense whatsoever but the market had already decided to push higher well before she even started speaking. It was the same bait and switch as we have seen countless times before. Futures are well down and then for no apparent reason they suddenly change and reverse into uptrend. We have four major reports in the in the U.S. coming out tonight. CPI flash estimate, GDP, Chicago PMI and Manufacturing PMI, so we will see how things look by the end of trade. Yellen made it quite clear that the Fed will change the rate of tapering if this economic data is due to more than just heavy snow falls, which it obviously is but they don't want to say we go it wrong. The VIX is not showing any signals at this time and it is below 15 so this is bullish for equities. This could be a false breakout but I think the market has decided that the Fed will have no choice but to un-taper. There is no point trying to make sense of any of this, you just have to trade it as it comes.
Click on chart to enlarge
No comments:
Post a Comment