Baby, here we stand again where we've been so many times before
Even though you looked so sure as I was watching you walking out my door
But you always walk back in like you did today
Acting like you never even went awayHere come those tears again - Jackson Browne
What a rally!
Yes, we missed it. Though we've had plenty of long-term winners (see September Trade Review), we certainly weren't expecting this short-term pop in the face of all this uncertainty surrounding the debt ceiling. Our short-term portfolio lost $6,000 (down 20%) in the last week as we kept taking pokes at a possible sell-off that never (so far) came.
Bulls continue to hang their hat on continued Fed easing and there's the undercurrent of a celebration that uber-dove Janet Yellen will take the helm in January and, already, they are talking about MORE QE than the $85Bn a month that is currently being pumped in to support the markets.
As you can see from Dave Fry's SPY chart, we're falling into a daily pattern of getting a massive pump from POMO, the daily injections of Billions of Dollars in Fed Funds to the Primary Dealers like GS and JPM who, in turn, use it to manipulate the market and paint the pretty picture we see on the Big Chart.
Today is an extra big one – about $5Bn will be placed today as part of a $16Bn week in Treasury puruchases alone! Of course that's par for the course on option expiration weeks, when the Banksters need a little extra cash to hit their targets on Friday – regardless of the Fundamentals.
Speaking of Fundamentals, KO came in-line on earnings this morning with year/year revenues…
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