One Central Planner To Rule Them All

By -

Yellen astounded everyone yesterday when she revealed herself as a dove, and made reassuring noises about the Fed’s willingness to spoonfeed and change nappies for equity investors into the indefinite future. Who knew? I just thank my lucky stars that I’m fortunate enough to live in the free market west where we have the world’s best and most open-handed central planners.

SPX broke back over the daily middle band at the close yesterday, and and long as SPX can hold that as support now on a daily close basis, I’m expecting at least a retest of the all time highs. SPX daily chart:

150319 SPX Daily Rising Wedge

SPX formed a perfect bull flag yesterday with a low just under the strong support at 2062 that I was talking about in the morning. SPX then broke up, made the daily middle band test at 2090, then the double bottom and flag targets 2093/4, and topped out at a possible rising channel resistance trendline that I’ve marked on the chart below. We are seeing some retracement today but as long as SPX can hold 2090 on a closing basis today, bulls are back in control. If we see a close back well below the daily middle band today however then all of the gains this week could unravel fast. SPX 15min chart:

150319 SPX 15min IHS

The most interesting thing for me that happened yesterday was the more than 5% intraday spike down in the US Dollar. That is suggesting that USD may well reverse before reaching my 105 target and if so then we may well now see a retest of the current highs, and then a strong retracement back to retest broken resistance in the 88-90 area. This is an important factor in the significant lows that I’m expecting to see in oil, gold, silver, platinum, GBP and EUR in the next week or two. I’ll be posting updated charts for all of these with my ideal targets over the next few days. USD daily chart:

150319 USD Daily Rising Megaphone

Kudos to Mike Vacchi at Princeton Trader yesterday for going long just before FOMC at 2053.5 ES and then for his next trade shorting the FOMC high at 2099 ES. Very nice work. Anyone who wants to see Mike & the rest of the trading team at Princeton Trader (including myself) at work trading intraday can take a two week free trial to look around. Wild days a speciality 🙂

Disclaimer: The reference to the ring of Sauron in the title is in no way meant to denigrate Lord Sauron by comparing him to the Federal Reserve. The reference is only meant to compare the ambition and ability to cause havoc of the Federal Reserve to that of Lord Sauron, rather than making the obviously absurd suggestion that there might be any equivalence in intelligence, knowledge, understanding, or in organizational, forecasting or planning skills. It is understood that all havoc caused by the Federal Reserve is unintentional.