[Chart courtesy of MarketWatch.com]
- Moving the markets
It was another wild ride in the markets when, after an opening dump, dip-buyers (or was it the PPT?) stepped in and pushed the major indexes slowly but surely back above the unchanged line, when another dive pulled them back below it, before a second rebound shoved them into green for a fifth straight day of gains.
Of course, no other event than Fed head Powell speaking can put markets in a tizzy fit like we saw today. He started with “patient,” which worked well for stocks but, then caused a pullback after uttering that the Fed’s balance sheet would be “substantially” lower. Translation: Quantitative Tightening (QT) is still alive. In graphic form, ZH presented it best in this chart.
Nothing else seemed to matter today, as even consumer related headlines were simply ignored. First, there was Macy’s record drop, which had the S&P Department Stores index gasping, as it went into freefall. Not to be outdone, the S&P airline index followed suit, except here the dip-buying crowed stepped in to make this wild ride a non-event, but the move demonstrated that all is not well in consumer land.
And again, ZH took top billing with this chart showing the current divergence between the S&P 500 and its forward EPS (Earning per share). Some analysts have called this rebound a bull trap, meaning this is simply an interruption in an ongoing bear market.
Our Domestic Trend Tracking Index (TTI) confirms that view, at least for the time being, as it is still positioned -4.89% below its long-term trend line.