This is the blog title I posted a month ago: Powell is scared. At that time, I was talking about the signal the junk bond market was sending to the Fed chair. And today, he is scared again. Why so? Here is what I just wrote days ago: But I think the FED may likely yield to the market pressure and may not raise rates at all in 2019. You see, the market has already given Fed “some color to see see” in the past couple of weeks. Believe or not, the Fed is very sensitive to the market. If the market becomes angry, the Fed will likely give in. This is basically what Powell telegraphed to the market today at a conference that he is listening to the market closely and will behavior properly per what the market is telling him, plain and clear! As I said, the market has basically priced in no rate hike in 2019 and it is even thinking there is a higher chance to cut rates than raising rates. The market is apparently very happy to see how Powell is giving in to the pressure and therefore made the stocks moonshot today.
As I said lately, the market wants to rebound from an extremely oversold condition and it is likely on its way to at least 2600. I'm not saying we are out of the woods already. Not at all and we will continue to see gigantic gyrations in a wide range between low 2300 to 2600. In the short term, agile trading is probably the only game that can work. "Buy and hold" won't be profitable in most cases.
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