Wednesday, 16 December 2015

2pm update - its time to raise rates

Its been seven full years.. to the very day, that the US federal reserve last changed rates, to a target range of 0-25bps. The FOMC announcement is set to announce a rate increase... somewhere between 10-25bps, almost as important though, will be the full policy statement, and how Yellen answers in the press conf'.



Okay.. time is about up....

Get set for some wild price swings.. we could jump strongly higher (2065 would be a major break)... or initially drop to 2025/20.

Best guess.. a rate hike of 10bps...  based on the notion the Fed wants to compromise with the equity market.

Fierce updates.... all the way into the close!

2.01pm.. Rates raised...  25bps to a fed funds rate of 0.25%, they raised the target range to 25/50bps

Equities naturally a little wild....

2.03pm.. ALL those who for years touted rates will NEVER rise again.... what have they got to say now?

sp +9pts.. back to the 2050s.

Things pretty okay so far for the bulls... still threat of 2025/20... but with each minute... probability is lessening.

2.04pm USD holding +0.3% in the DXY 98.50s.

VIX starting to rapidly cool, -10% in the 18s.       as sp'2060s are hit

2.06pm..  So.... dear readers..  ZIRP ends.. and the market is holding together very well.

Now its a case of whether we still see a brief drop to 2025/20... or close >2065.

In any case... bears look in dire trouble.. as the uncertainty has been TAKEN AWAY.

2.08pm    sp' +20pts @ 2063... testing the 50/200 day MAs...  if we can close >2065.. this really will be warning of a hyper-rally into 2016.

.. even AAPL is almost back to positive.

2.10pm.. I am surprised they went with a quarter point rather than a tenth, considering the recent market upset...    gotta wonder what Draghi and Kuroda are thinking of this.

In any case..  the Yellen is 15/20mins away....  as the capital markets are remarkably stable.

*bonds..  TLT.. trading flat.

 2.15pm.. watching clown finance TV.. its kinda funny to see a few of them get a little its finally been done!

So.. will Yellen give the market an excuse to briefly wash out to the 2025/20 zone... before surging upward? Maybe if she alludes to rate hike'2 at the next FOMC.

2.19pm... commodities. It is interesting that Gold and Oil are broadly trading u/c from earlier gains/losses.... most aspects of the capital markets are VERY stable.

sp +13pts.. 2056....    2065 remains the BREAK level to open the door to 2100s by Friday.

Yellen is due in 10'

2.22pm.. It is notable that the hourly upper bollinger will be around 2075 at the close.  Lower bol' will be around 2K.

On no reasonable near term outlook does the Monday low of 1993 look in jeopardy.

2.27pm. chop chop.... as market now awaits Yellen.. due in a few minutes.

STILL threat of sp'2025/20.. as a brief tease to the bears...before sustained market upside.

notable weakness, Oil -4.4%...

2.32pm.. The Yellen speaketh.... indexes remain choppy.

Cyclically.. we're due to cool to 2025/20.. no later than tomorrow 11am.  If that does happen, no doubt the mainstream would get rather twitchy about things.

As a trade though... overly risky.   With the uncertainly gone.... market should broadly climb.

*bonds.. TLT +0.5%... as yields are now cooling.

... I guess you could say... it was largely baked into the financial cake.

2.38pm... will be interesting to see how the Asia/EU markets trade...  considering the initial US market reaction... things should favour the bulls tomorrow.

USD -0.2% @ DXY 98.00.....    again... a rate hike was already baked in.