sp'monthly
Transports, monthly
Summary
Which is the leader?
Without question, the Transports IS..and always has been the leader, literally usually referred to as the 'old leader'.
Yet, what does a brief perusal of the usual chart websites all suggests? They are still clinging to the notion of a giant bearish wedge..as seen on the SP'500. But that is the WRONG chart to be focusing on.
It is time for the doomer bears who are still staring at the SP' charts..to maybe spend a few hours instead staring at a chart of the Transportation index which was the LEADING warning of massive upside from mid-December onward.
Be mindful of the Bernanke POMO
I am really surprised at the lack of due respect the new QE - via POMO, is being given by the majority of posters out there. After all, just look what happened last time we had this stream of 'free money' thrown at the primary dealers..who are (probably) then having it funnel its way into the equity market.
The relentless algo-bot ramp of autumn 2010 - and continuing into spring 2011, was something I thought most would never forget. Yet they have.
So far, we've see 3 weeks of POMO..and 3 weeks of relentless melt. How about another year of this? Or 5... or 10? After all, just which part of 'endless QE' do traders not understand?
see: POMO schedule - via NY Fed
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As for tomorrow, again, what should we expect? Maybe minor declines..and then the algo-bots will likely kick in during the afternoon.
What IS absolutely clear, even a retracement down to the sp'1450/40s - were it to occur, would do nothing to damage the now extremely bullish equity market.
*ohh, and go look at the world indexes, the majority of which are now busting well above old resistance, and there is open air of 15/20% higher -and that's not even a particularly bullish outlook.
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Its time for the remaining bears to go stare at that Transports monthly chart for a few hours, and then spend a little time on the New York Fed website.
Goodnight from London