Curses, Foiled Again!

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With the massive NFP beat on Friday, bears thought they just might have a fighting chance. The odds of a rate rise in December have clearly risen.

And, sure enough, there was a 22-pt drop off the pre-announcement highs in the futures. But, the dollar — which had already broken out of its seven month consolidation — was further emboldened by the prospect of a massive 1/4% boost in short rates. And, TPTB were quick to seize on the USDJPY strength (+1.15%) it produced. What happened after that was a testament to the degree of control they still exert over currency markets and, hence, the equity markets. The net result was a drop in SPX that was couldn’t even reach the next lower Fib level. But, that was Friday. Today’s another story.