ECB puts the cherry on top!

Did you see the Dax yesterday…down 120 because the ECB made no noise about massive printing of money. After all, they have been teasing. But soon after, it is announced that in January, the ECB will create massive amounts. This is on top of Japan, China and all the 0% interest rates around the globe. This new round of money printing was a coordinated effort to keep markets from getting worse….and a job well done. Of course, the DAX is up 170 as we write this.

As of this second, there continues to be no sellers. Sellers last for hours right now off of the climax low in mid-October. Yesterday was another case in point. Markets teetered and then just floated back up into the close.

Oil prices down, interest rates at zero, massive money printing and finally, after all the easy money, an economy that is getting traction in the U.S. Markets remain near-term stretched and extended to the upside with sentiment being massively bullish.

Lastly, my Knicks are now 4-16 for the year. Just had to mention.

Like a broken record!

Like a broken record, major indices remain stretched, extended and overbought while bullishness has become rampant. In fact, our sentiment numbers are almost surpassing the numbers we have seen when the market was topping into October.

But everyone continues to ease…everyone is printing money…central bankers do not shut up about the potential for more QE here…and as you know, markets still love it. And in case you did not know, at the ECB…DEPOSIT FACILITY UNCHANGED AT -0.20%. Yup…that’s you giving them a toaster, not the other way around.

Some of the big financials we wrote about indeed moved above resistance but that will need to stick. And the SEMIS just keep rolling. Like a broken record, if the semis and big financials are working, there is little chance of lower prices.

Just keep in mind, this move up has become a little quieter with the air of nothing can go wrong as we are in December. From extended conditions, a pullback can happen at any time…so be ready. That said, a pullback is welcome and would be buyable at this time as there continues to be underlying improvement.

Watch the big financials!

We are watching the big financials here. BAC,C,GS,JPM,MS,WFC are all acting constructively. If they can break out of the range-bound action they have been in, be rest assured there will be more upside in the market. As we have told you forever, if big finacials and the semis are acting well, there is no chance of a good correction. We will know soon.

 

The Fed continues…!

We had a report about yesterday’s icky action all set for you. We could have talked about any number of things…the Russell again leading on any down move, the Regional Banks rolling over and a few other tidbits but only one thing stood out for us. It is the same thing that stopped the markets from going into a real correction in October. The Fed is at it again. They never stop.

Yesterday…Fed’s Dudley says “pace of tightening to depend on market response, not just economic outlook.” There you go! They got your back. They are watching markets and they are affecting markets. In other words: if markets go down…we will stay easy and even print more.. The question is why these people are scared of a little double-digit correction. The answer is…they know that’s all they got going for themselves and cannot afford “the wealth effect” to be harmed. That is the wealth effect for the rich…the castration of the middle class and the savers.

We repeat something we have been saying for a few years…we had better not ever get to the point where markets do not listen to the Fed and their moves. The good news…so far, the market has nothing but open ears.

Back to our regular scheduled programming in our next report.