Markets – Macro – Technicals

A Guinness Bottom?

guinessThis morning’s quick spurt off the lows, courtesy ECB rumor inspired, made it again clear that markets need and want QE to rally. Janet Yellen is facing the first real decision of her chairmanship this week and must decide between credibility and outright pandering.

All we know is that since 2009 equity prices have not been able to sustain higher prices without QE. Now if the Fed goes the credibility route this week markets may actually get a dose of reality and sellers may be able to push their weight around a bit.

Since the Bullard “QE extension” comments sellers have been completely AWOL. What might be the fall surprise? A quick 3% dip below the October low for a 38.2% Fib retrace off of the September highs and the QE3 launch lows in November 2012:

ES 1759

That gets you to $ES 1759 sometime in November which may make this the Guinness bottom. Some may call it a bear’s wet dream, but if Yellen panders and extends QE we may just end up with a wet bear and not a wet beer:

Wet Bear

For more information about our trade philosophy or on how to become a member please visit the About and Membership pages.

Advertisements

Tagged as: , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

The material on this website is provided for informational purposes only, as of the date hereof, and is subject to change without notice and does not constitute investment advice.
Home | About | Disclaimer | Contact
Copyright © 2013-2017 NorthmanTrader
The materials on this website may not be suitable for all investors and are not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.