SPX Daily Chart Second Fed and Global Central Banker-Induced Rally for Q4 2015 Verifying Central Banker Collusion

The second central banker-induced rally occurs in Q4 2015. In three days, the SPX is up from 1973 to an intraday high at 2078, an astounding 105 points, +5.3%. The central bankers are powerful. Fed Chair Yellen creates the rally by keeping the considerable time phrase in the FOMC statement. The dovishness creates a buying frenzy in stocks since the Fed does not plan to raise rates for six months or more. The ECB chimes in promising more stimulus so the central banker collusion creates a three-day upside orgy in stocks. The Dow is up from 17068 to 17874, 806 points, +4.7%, in only three days. The COMPQ is up from 4557 to 4782, 225 points, +4.9% and the RUT is up from 1135 to 1199, 64 points, +5.6%, for the three-day historic Fed-induced Yellen Rally. All Hail the global central bankers; the modern day money changers!

The SPX all-time intraday high is 2079.47 on 12/5/14 and the SPX all-time closing high is 2075.37 on 12/5/14. The bulls move the SPX into the all-time high range last week but could not create a new all-time intraday high and could not create a new all-time closing high only a whisker away. Watch the pink lines to see if new all-time highs are achieved in Monday trading, or not.

The rally started on Wednesday, 12/17/14, due to Fed Chair Yellen's dovish words. It sure was not due to the start of Hanukkah. Traders do not expect the first rate hike until H2 2015 when before the meeting an earlier rate hike was on the table. The mid-October rally was created starting with Fed's Bullard pumping the easy money talk. This rally is started with the Queen of the Doves herself; Yellen. The big upside candlestick on 12/17/14 is the Yellen pump. Note the red lines that show the indicators weak and bleak with the lower price low that printed on 12/16/14. This clearly shows that the bounce had nothing to do with technicals, or fundamentals for that matter, and the bounce was purely due to the Fed intervention. The stochastics were oversold so that did help create part of the bounce so this point can be conceded. For a proper technical set-up, the price print on 12/17/14 needs to make a lower low with the indicators positively diverged; that did not happen. Thus, chalk it up to another Fed pump and some day this all has to be retraced since it is simply continual propping up of the stock market.

On Thursday, 12/18/14, the Swiss National Bank cut its deposit rate. The ECB coordinates with the Fed and announces that the members are in consensus that more stimulus will be provided to begin the New Year. Bingo. More central banker collusion and stock market pumping creating the strong 12/18/14 rally. Shamefully, the very same day, the Fed announces plans to cut back on banking regulations relaxing the new Volcker rules that were planned for two years. The Fed and banksters have no shame; they frolic in sinful union on a bed of money each evening. That provides a further late-day push higher that extends into Friday trading.

On Friday, 12/19/14, the BOJ colludes with the Fed and does not rock the boat at the conclusion of their two-day policy meeting. The BOJ says full steam ahead with the ongoing stimulus. Banzai! Comically, everyone is so bullish no one wants to call attention to the fact that Japan's 2% inflation target appears to be a hopeless goal; just like no one wanted to tell the Emperor that he was not wearing any clothes in the famous Hans Christian Andersen classic. For the icing on the cake, uber Fed dove Kocherlakota grabs a microphone and says deflation is the worry and more stimulus is needed. Bingo, the stock market upside orgy continues. Fed's Lacker says the Fed should not be in a rush to raise rates. The hits keep on coming. Each Fed sound bite causes long traders to buy stocks trained like Pavlov's dog. There is no reason to sugar-coat the markets. The global central banker collusion is obvious.

Since the Fed and other central bankers continue to pump the stock market, long traders rape the upside for all its worth but very few have long-term allegiance to the bloated equities markets. The retail trader is showing up right on time, ready to hold the bag, running into stocks like AAPL and MSFT that are creating much of the recent highs (a limited number of stocks not a good sign for sustainable upside) as well as dividend and utility stocks buying regardless of price. 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 Added 8:53 AM Tuesday morning, 12/23/13: The SPX prints a new all-time closing high at 2078.54 on 12/22/14 and the SPX all-time intraday high remains at 2079.47 on 12/5/14. The bulls look to punch out new all-time records today boosted by the happy +5% Q3 GDP number.