Fed Cat Bounce $SPY $QQQ
Ironically I had a conversation with a very large hedge fund manager before the Fed Cat bounce, that I would not be surprised if either Janet Yellen or Draghi will jaw bone the stock market and Shazam….it happened. It was so obvious. What more is obvious is how hard this market is to trade. Probably the only people who should be active in this volatility are day traders.
The market opened today with a continuation of yesterday’s rally ( dead cat bounce). The Fed minutes came out at and said in effect that the Fed’s employment level for tightening had been dropped. The major averages took off to the upside with the $QQQ leading the way with a gain of 1.72% while the $SPY was up 1.02%. The $SPY has now bounced off it’s 50 dma and the $QQQ is approaching this important moving average.
Well that sounds like great news and the bull market is going to continue ( which it surely might. Both major averages closed at their highs of the day, but volume was lower across the board. This shows that there was little buying pressure by large players.
The most beaten down leaders bounced today. This seems like a dead cat bounce or better said…Fed Cat Bounce!
Today’s action shows how difficult it is to operate in the current environment.