It’s becoming screamingly apparent that the Fed, in its efforts to utterly destroy the price discovery mechanism of the markets, will buy equities any time there is even the tiniest selloff. It’s happening day after day. Indeed, today is the TENTH DAY IN A ROW of the ES being positive. You think the government might do something if this was the tenth day in a row of stocks falling? I sure do.
Take small caps (please!) Look at the sell-off that took place in early trading:
Well, we can’t have that now, can we? After all, the S&P 500 is at the highest level in human history. So, day after day after day, the same thing happens: every little selloff is destroyed with a flurry of buying from the Fed with freshly-printed trillions of Fed-Bux:
This is not lost on the bond market, which has been heading toward the Exit door the past few days. We are very close to breaking the bond market’s uptrend for the year. Such a failure would just give equity bulls even more fuel, as if they needed any.
