I just finished watching Mr. Powell’s speech and all I can say is I didn’t hear anything that signals what I’m currently hearing across the business/financial media via many a talking head (cough Cramer cough) professing something on the lines as “That’s it the Fed’s blinked!” and so on and so forth. (Earlier article “Where We Might…” found here)
Maybe he did and maybe he didn’t, but for those that want to know here’s what I was watching from the moments his remarks were first reported (as in released prepared text) the instant reaction to that via the headline reading HFT algorithm trades. And then the reaction during the actual testimony and after its conclusion. This is what I noticed. To wit:
The above is the S&P 500™ using one minute bars/candles. Via a technical perspective what I saw was a knee-jerk reaction to a very easily defined pattern which would infer a short covering move with a run up to the highs of the day – a wait and see what else can be inferred as the Chair spoke – then another resolving of, again, a very well defined technical pattern.
So far this final pattern seems to be resolving like one would infer, which is – now resolving lower.
Doesn’t mean it will stay this way or continue, what I am saying is that I didn’t hear anything like “a soothing cooing of dovish nature” as what seems to be what everyone else is trying to imply.
Yes, the market rocket higher, but higher – not like some blast off that one would conclude should have happened if the “Fed. blinked” as is being portrayed.
As always we shall see, but at least we have something to watch for clues. i.e., follow through to the promised land from here. Or – a failing and retracing into the G-20.
Just sitting and waiting here at these levels is not a vote of confidence for “the coast is all clear” in my view. From my perspective it all seems nothing more than a technical reaction. And if I’m correct, then these calls of “blinking” are going to find out what the term “It’s all fun and games till someone loses an eye” means in the front-running “blinking” narrative.
As always, we shall see.
© 2018 Mark St.Cyr