It was one hell of a day! DOW up 490 points or 4.24%, and closed over 12,000. Volume was up big on the actual indices but not earth shattering on the DIA and SPY as one would expect from such a big day. That leaves me feeling a bit queasy. So we need a strong follow thru to confirm this move.
Back to the headline. Yes, was blind but now I see. Or hell, maybe I'm just hallucinating! It's anyone's guess. But here's my "musings". Two up days that are unexplained technically, unexplained fundamentally, and unexplained by news. For no reason that I can fathom the market rallied Monday and Tuesday. And.....how did I say it......oh, yea..... on crappy volume. Today suddenly the fog lifts and I can see clearly again! This central banking deal was in the works. It didn't appear out of thin air! This took some time and cadres of people to coordinate. I feel like the deer in the headlights, wondering why I didn't the following possibility Monday and Tuesday. The "smart money" knew what was happening. The insiders knew. People who know people knew. Hence the low volume on the Monday-Tuesday rally. Getting in early to reap the rewards of being "in the know". Today when the news hits they go all in. A huge gap up is created and profits zoom filling the coffers. The media jumps on it and adds fuel to the fire. More profits for those "in the know".
One has to wonder why the announcement was made "pre-market". Why not wait until after the market opens? Hmmmmm. Can you say gap up? Another interesting aspect is that all this occurs on the last day of the month! Hmmmmm. Why not wait until December 1st? Someone needing to report less than expected losses? Someone needing to make the end of month grade? I wonder who? Hmmmmmmm. The timing is just too convenient.
And this news of central banks working in concert is nothing but a thin veil over a big problem they cannot fix. It's a temporary fix and nothing more. It will supposedly give time for the politicians to do their job. Something they have refused to do for years now. Do you really think they will do it this time? Do you think Euroland leaders will act? Don't count on it. It's took a meltdown here in the USA to get something done and since then Congress has accomplished nothing to speak of. Let me say that again. Congress has done nothing to prevent another meltdown here. NOTHING! If that doesn't scare you, it should. Things that were put in place after the great depression to keep it from happening again were slowly repealed. And nothing has been put in place to prevent another meltdown. I won't even talk about the loss of the uptick rule.
At best, the central banks are are placing a band aid on the problem and enabling politicians to continue their poor behavior of "doing nothing". I do not think Euroland will make any substantial moves to fix this problem until things start to collapse as they did in the USA. After all, if we were so blind, how can we expect them to see? Maybe we should sing Amazing Grace for them! LOL
So here's the technical take with the caveat that it's a news driven market and technicals just aren't working well. The DIA and the SPY are back in the channel. And the candlestick is clearly a bullish candlestick. Looking at the charts the momentum is UP. Perhaps that's the new nomenclature. Market Momentum, not Market Trend. So today, while I ponder this change in wording, I'm not publishing the "Current Trends". Rather I'll simply state that the Market Momentum is UP. But watch closely. I would suggest that anyone looking to unload a few losers use this rally to dump 'em on the first sign of weakness.
Market Momentum - UP
Here's the charts.
