If the “market” is driven higher by blatant manipulation, in clear defiance of the fundamental laws of economics, does it still count as a rally?
Yesterday, the FOMC delivered a near carbon copy of its Sep 17 missive — the one that precipitated a 148-pt ( 7.3%) decline in SPX. Sure enough, SPX fell immediately after the press release. But, this time, central bankers were better prepared.
They started by pushing CL up and out of a well-defined falling channel. It would go on to rise 8.5% in less than 24 hours, and is up 9.2% as we go to press.Also within minutes, USDJPY was ramped (out of its well-defined falling channel) up to and over its 200-day moving average.Needless to say, SPX reversed its initial 21-pt sell-off and spent the rest of the day playing Follow the Algos. It finished well above its .786 Fib — the first one since the September lows that showed any promised of providing at least a modest retracement.
But, consider the chart below — which shows USDJPY’s 5 previous tags of the dashed, red trend line. ES – the thin purple line – didn’t react all that kindly in the past. Is there any reason to expect it will this time?
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