20180215：why still bullish

indy

Feb 15th

The Close

Well, today played out rather textbook, tested and failed the 50-day moving average and late day broke and closed above it.  Now is the true test that could really bring in quants and trend followers, a close above 2,760.  This is now turning out to be a V shape recovery, while its still on shaky ground, you have some positive forces that are playing out.  Bonds are starting to show short-term overbought levels, this will calm the 10-year yield down.  Secondly, those asset managers who have been sitting in higher than normal cash levels CANNOT miss this next 2 to 3% higher.  I am not going to speculate if we will test the old highs as forecasting as we all know it just doesn’t not work.  Let’s play the current trend and levels as best as we can.

※※※※※※※※※※※※※※※※※※※※※※※※※※※※※※※※

Why bullish?

1) New Fed Chairman Powell dovish comments helped the market.  They did not want to see the marekt sell off.  

2) Also strong CPI and PPI data did NOT borther the market.  

3) Market ignored 10 year bond rate at 2.9%. Current good economy can sustain it easily, even 4.5-5% rate by market analysts.  Under normal conditions,  the rate should go as high as 4.5-5% with global economy in hot.  

4) spx 2725 critical point is being broken.


Wow - Buying dip mentality still works.