Tuesday – Yellen Like Magellan

That's the hope on which the markets are pinning this little rally as we bounce quickly off S&P support at 1,750 and already back to 1,800 – halfway back to 1,850 – making this little pullback the smallest of blips in the great bull rally of 2009 (now up 177% in 5 years).  

What inflation?  There's no inflation – unless you are buying stocks – then there has bee lots of inflation!  The Fed has put $4 TRILLION into the markets through various operations and Global equities have gone up from about $30Tn to $80Tn.  Don't worry though, if you add in what the BOJ, ECB and PBOC put into their ends of the markets, we're only about $40Tn shy – how could that possibly be a problem?  

It's only a problem if people try to sell.  Then, like 2008, they suddenly find out there's no actual buyers and prices plunge.  As long as people keep believing that the market will always go up – everything will be fine – just like it was in 2007 (and 1999).  So – NO SELLING PEOPLE!!!  

Actually we did sell TSLA as they tested $200 and SCTY at $75 (see Member Chat for spread ideas) but we're also looking to add our bullish hedges (see yesterday's post) assuming the Futures rally holds up and we hit our tartget levels of Dow 15,900, S&P 1,806, Nasdaq 4,135, NYSE 10,100 and Russell 1,126.  As I noted yesterday, we'll be happy to see just 2 of those levels and we're willing to go bullish but a rejection here today indicates we're simply forming that shoulder pattern ahead of the next leg down.  

Look how quickly we flew from oversold back towards overbought on Dave Fry's McClellan Oscillator.  Think about it, we "only" bounced back half but we're 2/3 of the way back to being very overbought – even though yesterday was generally flat we still bumped the oscillator up 38% – that's not really a good sign for the bulls. 

Also a bad sign is Barclays (BCS) slashing 12,000 jobs as Q4 shows net losses of…

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