SOUNDING OFF ON BIG INDEX BREAKOUTS

From October 16:

“We are not sure this is being talked about enough. We think it of import.

Jay Powell, pretty much, for now, said good bye to QT …quantitative tightening where he was letting his maniacal amount of money printing run off. This potentially and probably means when the bonds he bought mature, he will take that fake, conjured up money and go back and buy into the bond market. Just the perception gives the bond market more fire power and more importantly, can take bond yields lower. In fact, since the announcement, bond yields have gone lower taking the 10 year yield down near 4%.

Do you know what markets usually do when the fed is buying the bond market with fake, conjured up money? This man is going even more easy with markets at highs, gold soaring and the economy showing 3%+ GDP. And away we go?”

Fast forward to this morning.

Another 100% tariff threat that was never going to happen is gone. The October 10th drop on the threat was gone one hour after the close that day as they know what would occur if ever a 100% tariff was put on. That Friday, both the DOW and the NASDAQ dropped over 800 points. Markets move threats.

Add in the fed lowering rates this week and again, lowering rates and stopping QT and buying more bonds with conjured up money with markets at highs and GDP in the 3s. To repeat, what do you think markets usually do with this set of circumstances? Easy, easier, easiest money!

Another strong gap to the upside this morning. This on top of the strong gap on Friday which broke out the indices of a short range as it looks like things were known on Friday. As long as the breakout sticks…

New highs usually beget new highs. The strength has been in tech/semis. That is continuing. The lagging big banks woke up Friday. Big banks quite the important in the market.