Or does the market smell QE4...after all the strong dollar emerged following QE3 and the semi-hawkish talk of the Fed.
A good way to think about the FED is as an insurance adjuster. If the risk feels higher to you, the FED is probably also feeling it. Pay close attention to the VIX. Above 20 and it doesn't raise. What markets will do is calm down (meaing VIX < 20), FED will raise rates by .10 bps thinking the all-clear is in, and then markets will crash 100 SPX. LMAO. If you are a bull, you want the FED to raise so that when the market crashes, it will initiate QE4, QE5, QE6, Operation Twist 2.0, ad infinitum. Then markets will go to DOW 20,000 on new delusions that the valuations are real.
Actually, the theory is that China was selling ~100B in Treasurys to drive yields up to prop up the dollar. Maybe.
CHECK OUT THESE CHARTS FROM THE PAST, very interesting....im still bearish after the recent buying of the dip, even if the markets climb above 17,000 and higher Im staying bearish, 6 year old bull market is tired and completely exhausted...... So here is an article comparing some of the past rallies off huge sell offs only to see the market fall once again.... If you're feeling bullish after last week's stock market rebound, look at these charts Henry Blodget Last week was a heck of a week in the global markets. On Monday, it looked like the world was ending, with the Dow Jones industrial average plunging more than 1,000 points and closing down nearly 600. Tuesday saw more carnage. By midweek, however, stocks were ripping higher again. And by Friday, they actually closed up for the week. This rebound triggered the familiar cockiness from the bulls: The "bottom" was in. The wimpy weak hands had been shaken out. It was off to the races again. In fact, last week's market rebound tells us nothing about what's coming next. Yes, it might have been a "V-shaped bottom" that will now be followed by another surge to record highs. Or it might have been one of those violent "bear-market rallies" that have punctuated nearly every major market collapse in history. If you're feeling emboldened and cocky about last week's rebound, you should check out the charts below. They're from portfolio manager John Hussman of the Hussman Funds.* These charts show how the last three major market crashes were preceded by initial drops of 10% to 15% followed by sharp rebounds. Then, just as many traders had decided it was safe to get back in the water, the real crash began. First, 1987. The top chart shows the encouraging-looking market rebound after the initial sell-off that summer. The bottom chart shows what happened next. John Hussman, Hussman Funds Then 2000. As I and many other veterans of the era remember well, the initial sell-off in the spring of 2000 was followed by a reassuring summer recovery. By fall, we had regained almost all of the lost ground, and boatloads of smart people were congratulating themselves for "buying the dip" and "climbing the wall of worry." Then came the disastrous 18 months that followed. John Hussman, Hussman Funds And 2007. After two recoveries following the initial drop in the summer of 2007, recoveries that were accompanied by assurances from all manner of experts that the mini debt crisis was "contained" and that there was no recession in sight, stocks fell off a cliff. John Hussman, Hussman Funds In short, as Hussman explains in a note this week, the recent stock market action actually looks similar to the action that has preceded the three most recent crashes: [M]arket crashes “have tended to unfold after the market has already lost 10-14% and the recovery from that low fails.” Prior pre-crash bounces have generally been in the 6-7% range, which is what we observed last week ... Meanwhile, even with stocks down about 5% to 10% from their record highs, valuations remain extreme. This chart, also from Hussman, shows a measure of valuation that, in Hussman's analysis, has shown the greatest correlation with future long-term price performance. The blue line shows the annual return that the measure predicts stocks will provide over the following 10 years, which is currently about 0%. The red line shows the actual performance of stocks over the following 10 years. (The red line ends 10 years ago.) John Hussman, Hussman Funds How big a pullback could we see if the recent dip is only the beginning of a crash? This and other valuation analyses suggest that "fair value" for stocks is only a little more than half of today's prices. So, as Hussman observes, a pullback of 40% to 55% from the highs would not be a worst-case scenario. Rather, it would be a garden-variety regression to the mean: We fully expect a 40-55% market loss over the completion of the present market cycle. Such a loss would only bring valuations to levels that have been historically run-of-the-mill. So don't get cocky! Read more: http://www.businessinsider.com/stock-market-crash-charts-2015-8#ixzz3kPBuVGMf
Thanks....I knew that had to be posted to this forum....will see in due time what happens...only a matter of time.