S&P 2000 and How I’ll Learn To Love The Taper


“The beginning of a Fed tightening cycle is bullish far more often than not” – Davis Bianco

I joked yesterday that by the time the financial media stops droning on about Fed tapering, the $SPX will be 2000. As Bianco points out, and I agree, Fed tightening only really sucks at the end of the rate hike cycle. He maintains that the party really starts when we see the first Fed uptick.

This market  is treated with the care and handling of a Faberge egg by the Fed, gently telegraphed and massaged. Gone are the days when you would leave your trading station for just a minute, and return to a massive move in the market because the Fed just hiked the discount rate with nary a warning.  They used to do this when you could still smoke on planes and elevators. Not anymore. Now the Fed gets your slippers, your favorite blankey,  a martini, and tucks you in before they release big news. I talked about this a week or so ago. While we talk about it, and worry abut it, the market is already repricing itself. You saw some of this last week. Non farm payrolls had a lot to do with last week’s pullback too. Buying the dip still works and as always, its all about your time frame when buying and selling stocks.

Gold hates the lack of fear and inflation and will go lower. I like $GLL  Did we see the short term bottom in the market? Maybe, but I told my subscribers early Friday morning that if we rallied hard on Friday we probably did. We rallied pretty hard.

It may take a another few days for some charts to reset technically, but I’m still bullish a hell.

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Have a great weekend. I will post some set ups here today or tomorrow.


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