EARLY NOTES

Since October 3 when it was leaked the potential for some QE and then the October 8 confirmation, you know what markets have done. Powell figured it out. Easier money on any and every correction. Amazingly, it still works after over 10 years. Yup…word leaked out around October 3rd that there was consideration for some sort of QE. Markets bottomed that day. Not kidding…and on October 8th, not with an announcement but at an interview at some sort of economic’s club, Powell confirmed QE BUT DON’T CALL IT QE. It wasn’t any ordinary QE but as of this writing, Powell is on a run rate of over $1.5 trillion of printed money for the next year. This is more than Bernanke’s ($1 trillion) QE at its most. Just keep in mind, Bernanke printed money when unemployment was in the high single digits and when we still did not know if our financial system was stable. What is Powell’s excuse doing this at 3.6% unemployment and with markets near highs? It’s called NOTHING IS BAD AS LONG AS MARKETS GO UP. It just took Powell time to figure it out.

As long as the major indices do not tuck their head in like a frightened turtle and fail this move out above range, all is well. The good news is that growth is acting better. The good news is that the all-important SEMIS and FINANCIALS continue to lead. For sure, it is not a dart throwing market as by our count, only about 60% of the market is working but whatever is working is nothing to sneeze at. For sure, sentiment is off the charts too bullish here but so far, we cannot even get a 1% pullback. Markets love QE…BUT DON’T CALL IT QE.