Game changer?

1. If you’re still hung up on macro, here is a nice list of positives (and negatives if anyone cares about them anymore!). The fundamentals are not great, but one cannot expect them to be. Stocks are discounting mechanisms after all. All this fanfare and SPY levels are back where we were last summer. There were several attempts to break through SPY 135 last year, we will probably break and stay above it soon enough.

2. Technically equity markets have broken out, albeit to varying degrees. Technically, there are all those resistance levels up above, not that anyone has cared about them. The VIX is in the high teens, SPY options volume was huge in Friday, what portion was sales and what was purchases requires a closer look, but the VIX did open low and chug higher all day.

3. This will (should/has already) change sentiment and that is an important part of what policy makers hope to accomplish. It  doesn”t mean one should go out and buy stocks hand over first, but people were doing that even at the close on Friday.

4. Friday’s news should dispel any concerns that macro data releases are fudged.  It is quite likely that this was not known when the Fed made its statement about keeping interest rates low for an extra year.  It would be remiss not to point out that there are some concerns about BLS adjustments causing such a difference between actual and expected. Here is Zero Hedge on that subject.

5.  I am a lot more in cash than I have been in months and lightened up a lot yesterday. I could have put stops but overnight moves have been very frequent. Besides, 20% in a few months is enough to give thanks. I have  to remind myself to buy some back if this keeps going. I am not usually very active after earnings season and will probably use options if opportunities present themselves.  Will stay-two sided for sure. Out of half the GLD puts, there is more to go, especially if this euphoria causes people overseas to chase US stocks and take the dollar up, (but the word was that they were doing this from Europe already?).

More later.


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