So the Fed croaked. No surprise as they have signaled it all year, but perhaps the extent of the capitulation is surprising.  How scared are they? No rate hikes in 2019, one rate hike in 2020 and markets don’t believe a word of it as they are now pricing in a 47% probability for a rate cut into January.

That’s recessionary fear action, far from the optimism of just a few months ago. You know my view on all this:

The Fed capitulation is complete and official.
Think that’s bullish all you want.
It’s not.
It’s an admission of failure.

— Sven Henrich (@NorthmanTrader) March 20, 2019

Quick take:
This full capitulation by the Fed is an acknowledgement that the US economy is way worse off than acknowledged by optimistic markets.
The blatant attempts to goose stock prices is an effort to avoid a recession.
But it’s coming & they know it, they just won’t say it

— Sven Henrich (@NorthmanTrader) March 20, 2019

And boy have they goosed markets.

How massive has this rally been?

Well, it’s created one of the largest weekly MACD histogram deviations to the upside ever.
In fact the only precedence I have for this is 1999. And what index was jammed to the max in 1999? You guessed it, the good old $NDX.

Now granted we were deeply oversold in December, but holy cow, how vertical is this?

Totally maxed reading. With negative divergences.

And this is where the Fed goes full dovish? Something’s off.

Related reading:

BS Alert

Deception

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