We've been here before... on Monday morning, before all H-E-Dubble Hockey Stix broke loose. The SPX, which dropped as low as 1737.92, is back to 1773.40, but Volatility really slacked off back to where it was. That is sure odd the evening before Non Farm Payrolls and Employment* Figures come out. That is a big asterisk because a lot of people were kicked off pogey over the new year. And we have a revisit to the Debt Ceiling looming.
To see what it looks like with the Fed Tapered Off, plot a ten year of the SPX, count backwards from 2011. That booster stage has dropped away unless they re-ignite another stage for QE"x", and another shot. They ain't gonna tell you but they don't want to. Count how many double corrections there has been. Stock Market isn't really in their mandate. The cherry picked U1 unemployment (Try U6 for a more solid blast of reality) and the non farm payrolls, linked to housing, is.
Hank Paulson, Treasury Sec over The Big One in '08, gave an interview yesterday where he said the banking regs don't address the root cause: Fannie and Freddie. So proceed with caution. He thinks it is the same darn setup. Yikes. These guys can't give an answer over Libya after more than a year, let alone answer to one of those whoppers.
It shows the unpredictability of trying to pick bottom. Over the past few weeks, the market progressed to a series of newer lows from a new high set of SPX 1850.84 on January 15. There were lots of fake rallys that would get wiped out. Yesterday finally rose sharply before the market even opened and after yet another test of the new low 1740 area after closing Wednesday. Even traders at the exchanges were getting worried at that point.
But what a difference a day makes. So watch out and happy trails. Watch out for news an hour before the open. Be on the lookout for a sudden snapback after the best day of 2014 so far. After all, the VVIX is back and still holding 92.xx + levels after touching 109.67 Wednesday after lunch.
No comments:
Post a Comment