Nothing like economic misses and central bank QE chatter to get markets back on rally track. As I’ve been outlining in recent weeks the case for a bullish run into the 1970s was strong. Now that we are here and 8-9% higher from the lows less than two weeks ago what’s the verdict?
Mine is that it’s garbage until proven otherwise. Not even including today’s gap driven ramp I’m watching the high/lows and they look dreadful compared to rallies in the past several years:
Zoom in closer to just 2014 and the picture gets even worse: Every price advance into the 1960-1980 $SPX area has resulted in lower high/lows. In other words: Fewer and fewer stocks are participating and hence this rally is the most divergent yet. $AAPL yay, the rest meh:
But hey it’s all still central bank ville and with ECB QE rumors keeping the baton myth alive it is up to Janet Yellen tomorrow to clarify whether she has backbone and will end QE or whether Bullard was indeed her authorized market savior when he uttered the word “Extension” to put a floor under a sinking market in October.
But the month must be saved, mark-ups are well under way and everything’s a squeeze. If Yellen extends then $SPX 2000+ is a shoe-in it seems, and if she doesn’t buybacks and performance chase will have to do the trick on their own. Or do they?
— Northy (@NorthmanTrader) October 27, 2014
Categories: Daily Market Brief