[Chart courtesy of MarketWatch.com]
- Moving the Markets
Even President-elect Trump’s early remarks that “I am going to bring down drug prices” couldn’t prevent the major indexes from storming into record territory with the exception being Healthcare-names as the Biotech ETF IBB got flattened by losing -2.94%.
It started in Europe where, despite the worsening Italian banking crisis, which is counting on a bailout, investors ignored all news, good or bad, and decided that equities were the place to be. All six major European indexes ended up in the green with the FTSE being the leader sporting a gain of +2.10% followed closely by the DAX with +1.96%.
A new intra-day high in the Transportation index, the first time in 2 years, confirmed the bullish tone as bonds, stocks, gold and the VIX all closed higher. The indexes inched up in the morning when all of a sudden “a buying algo got excited,” as ZH put it succinctly:
S&P futures and the SPY ETF suddenly exploded in volume and ramped higher. In those few seconds 2 million SPY shares went through (around $450 million) and 32,000 e-mini contracts (around $3.5 billion) screamend through the markets.
This certainly is not what you would consider a normal market based on fundamentals, it’s a manipulated market supported by nothing but hope and hot air, which will not end well. In the meantime, however, we will enjoy the ride but are prepared to jump ship should the need arise. After all, the following picture demonstrates the only world of reality: