Index futures have opened quietly Sunday night, implying DaBoyz are as clueless as the rest of us about where the broad averages are likely to head next. Friday’s refreshing plunge, something I’m sure we’ll see a lot more of in the months ahead, looked like it had a bit further to go when the closing bell rang. We’ll be better able to judge how much selling power is left by watching index futures interact with several Hidden Pivot supports I’ve flagged in Monday’s touts for the Mini-Dow and -S&Ps. Gold continues to look unimpressive, but I’ve given bulls the benefit of the doubt nonetheless, as I usually do.
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Refreshingly direct, as usual. Thanks for all your great work and Happy Holidays, Rick.
RA,
You’ve been steadfast (correctly so) about the Fed’s inability to raise rates for years and years and years. With only a couple days left to change your mind, will you? Embracing a measly 25 BPS increase in the Fed Funds Rate surely won’t cause financial Armageddon 2.0, will it? It seems farcical that we’ve come to this, namely the smallest incremental raise tumbling the house of cards, again. This time though, if the house is about to be toppled, no TARP, TALF, Twist, or QE program will be large enough to fill the hole blown wide open by the quadrillion in derivatives that’s been transferred to the IOU column of US Taxpayers. Will the head in the sand crowd go quietly after realizing their kids’ kids’ kids life savings have been pledged to repay shady bets on flimsy credit backed securities? What about this seemingly remote possibility that they dovishly pass through the 25 BPS and massive capital flows crash onto US shores looking for a new home? The interest rate complex flattens dramatically along with CAP rates compressing in commercial real estate and equities enjoy a blow off top the world has never witnessed? This made for Hollywood ending has about 3 Delta but you’ve made fortunes owning those FAT Tails, haven’t you?
SB
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The whole will-they-or-won’t-they farce grew too stupid to care about, Shawn. I’m ready to concede that the Fed will at least attempt to walk the walk with a 25-basis-point hike before the year ends. But no one actually expects real, actual, ‘sincere’ tightening, and so the question becomes: What will they do next? My guess is that the Fed will segue into ‘will-they-or-won’t-they-do-it-again’, and that the stupid game will continue until the stock market crashes, mooting the question. RA