We’ll Take the Odds on Yellen’s Latest Bluff

Yellen’s talk on Friday was predictably hawkish, but we’ll take the odds if anyone wants to bet that tightening is coming any time soon. Far more likely in our estimation is that the Fed will loosen with a revival of ‘quantitative easing’.  Were this to occur, it would almost surely cause stocks to soar. Indeed, this is about the only thing we can conceive of that could power the broad averages to some longstanding, very bullish technical targets we’ve had outstanding for a while. One lies at 2230.00, a September E-Mini S&P target 62 points above current levels.  Although we think investors would have to be nuts to push the futures to such heights in the current economic environment, from a chartist’s perspective the target looks like a lock-up.  Typically, would play it by taking bullish positions until the target is reached, then shorting the bejeezus out of it, cushioning the entry risk with profits made on the way up. For a front-row view of the process in real time, drop by the Rick’s Picks chat room with a free two-week pass available here.

  • John Jay August 28, 2016, 11:18 pm

    The Federal Reserve/Federal Government Tag Team has proven time and again that there is no limit to the Ponzi.
    And that they will do whatever it takes to block deflation.

    TARP to cover up worthless MBS paper?
    Check!
    Cash for Clunkers to bail out Big Auto?
    Check!
    ACA written by the HIC to bail out the HIC?
    Check!
    Let the FED buy up the entire Stock and Bond markets?
    Check!

    Do you get the picture?

    And even if there happens to be Commodity Deflation, the lower prices will not be passed down to the serfs!

    Case in point?
    A CBOT Wheat Contract has fallen from 939 in 7/2012 to 381 as of this past Fridays close.
    Hmmm, let’s see that is about a 60% decline.

    Now, on the retail level, for you and I, a one pound box of Barilla whole wheat pasta in that same time period has gone from $1 to $2.29!
    Hmm, that’s about a 229% price increase.
    For a commodity that has fallen 60% in price at the wholesale level!

    So it looks like…………

    No soup for you, one year!