Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Looks like people are jumping on the upside bandwagon again as the S&P has cleared those highs of 1392-1393 at the ‘top of the box.. Keep in mind Bernanke has us in a “Tepper moment” again. [Sep 24, 2010: Video – Appaloosa’s David Tepper – Ben Bernanke Will Make Everything Go Up in the Can’t Lose Environment] Either the economy gets better, or the Fed comes in with guns blazing. Either scenario the stock market “wins” in simple think. Note how today’s weekly jobless claims and a few misses by a handful of high profile companies means nothing in that viewpoint. Rightly or wrongly that is the Pavlovian response in our era of permanent moral hazard. [Apr 1, 2012: Is it Really as Simple as Don’t Fight the Fed?]
Written on April 1st:
And does April-May… the only period the market may doubt a new easing program is coming down the pike, represent the only time this year the market “would be allowed” to correct?
So we had those FOMC minutes where we had ‘doubt’ the Fed would support the stock market – err help the economy with easing. The market sold off for a few weeks. Yesterday Ben removed the doubt (as if there should have been any)… so back to status quo?
Mr. Bernanke said the Fed “remains prepared to do more” to help the economy should there be further deterioration. We don’t know what will trigger QE3, but it’s clear it’s still out there.
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Technically now one can use the “resistance becomes support” thesis, and S&P 1392ish is the line to work against.
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