Zip it Bernanke
Bernanke was doing fine until May when more hawkish remarks have upset stock traders.
Yesterday’s date of 6/6/06 (666 being the sign of the devil) was celebrated by the opening of the remake of The Omen. For a while there the market was “feeling” like it might be on a fast track to hell. But by the end of the day a partial recovery left the averages with another downside spike that tested support:
The above chart shows the NASDAQ 100 index with various indicators. Yesterday’s action tried to force the index below the DMA channel, but an end-of-day rally helped to keep the close within the channel. Choppiness has now reached an extreme level of 64 – not surprising given the volatile but trendless action over the past 10 days. The EBB indicator (a measure of VIX momentum relative to the momentum of the market) has bottomed and is trying to get above zero. Seasonally there is almost no negative seasonal heat (see magenta circle in chart) heading into mid-July.
Now, if Fed Chairman Bernanke can remain silent for the next 4 weeks or so, the market may indeed have a chance at that testing rally we have been looking for:
The above chart shows the closing change for the Dow Industrials on every day the Fed Chairman has made public remarks or speeches. Bernanke was doing fine until May when more hawkish remarks have upset stock traders.
We never said it would be easy, but we still are looking for a rally into mid-July.
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