Friday, October 16, 2015

S&P 500 Futures Catapult Higher on Delay of Federal Reserve Rate Hike Unitl 2016 and Other Central Banker Pumping

The stock market dips are always saved by the central bankers; at least since 2009 when the Fed began pumping the markets with easy money. Several times over the last few years, the markets were stick-saved by central banker collusion. The two-day stock market rally began directly as a result of the WSJ article by Jon Hilsenrath. This is not the first time that a Hilsenrath article has created a stock market rally. Many market participants consider Hilsenrath to be a mouth piece of the Fed so when he says the first rate hike is pushed into 2016, global traders immediately hit the buy button in the futures. On Wednesday evening, the S&P futures popped nearly 15 handles after the article was released.

This set an optimistic tone for Thursday and Asia and Europe run with the ball fueled by talk that the PBOC (China's central bank), the BOJ (Japan's central bank) and the ECB (Europe's central bank) will continue providing stimulus. The easy money party kicked into high gear. Traders are drinking Fed wine and injecting central banker heroin into their veins buying any stock with a heartbeat. The ramp higher in the futures is so obscene that even Caligula would blush.

For good measure, ECB's Nowotny says more QE is on the way and Fed's Dudley chimes in with dovish commentary hinting that the rate hike will likely keep slipping into the future. The central bankers are the market. If you do not understand this factor during the last few years, then you simply are not paying attention. The two-day "Hilsenrath Rally" runs from 1982 to 2027 a 45-handle gain of +2.3%. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note: The futures chart is courtesy of a very useful site and annotated by Keystone.

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