Once again Fed Chair Janet Yellen did her best Alan Greenspan imitation and wouldn’t commit to anything while Vice Chairman Stanley Fischer sounded like he wanted to be sure the stock market doesn’t become too euphoric. The crowd interpreted all this the way they will, but for me nothing has changed. It’s still a case of “good cop, bad cop” and they are leaving all their options on the table.
In a speech last week, New York Fed Chief William Dudley said they could raise rates as soon as September. After all, the jobs report was so good how could they resist? Well, that was Tuesday and the markets didn’t like it. But the rest of the week was more or less flat because we’ve all seen the Fed’s various chiefs play bad cop to Fed Chair Janet Yellen’s good cop every 6 weeks or so.
Want to see something fantastic? If you got this one you had the key to Thursday. This square out symmetry hit very early Thursday morning on the crude oil chart. After all these years, I figured out exactly what this is. What I can tell you is financial markets have overcome a lot of intermediate level time windows to this point, the last of which is 721 weeks up from the 2002 bottom.
The jobs report came in with a good headline number at 255,000. Wall Street went ballistic and even noticed a twinge of euphoria Friday morning. Hold the phone, I’m concerned it isn’t what it seems. You’ve seen me flat out say from time to time I think some fundamental number is a complete fabrication. I think this number is on the level. But I also think they got there by the most creative levels of accounting gimmickry.
Another week, more mayhem in the world. What else is new? Last time I showed you the chart of the late 60s. The more I look at this situation, the more I think these times are more treacherous than 50 years ago.
Last week I showed you the incredible square out on the DAX for the Brexit high. Late Monday many charts formed a new square out low, which propelled markets back up. Probably the best example I have for you is the S&P 500, which turned back up at the 1991 handle in 91 hours for the move.
While the UK and the rest of the world was trying to figure out who really won the vote on Thursday night, I can tell you beyond a shadow of a doubt the real winner was WD Gann. Oh yeah, I wouldn’t kid you about something like this.
Wednesday became a day that sold on the announcement but settled in flat as I think traders weren’t so concerned as to what the Fed might do as much as they were looking for some bravado after the recent comments they’d raise rates soon.