If This Was 2016's "Bullard Sticksave" Moment, This Is What Stocks Will Do Next
Back on October 17, 2014, the market was in free fall mode, when out of the blue during an interview with Bloomberg TV, one of the Fed's alleged biggest hawks hinted that the Fed could do QE4 if the rout continued. The rest, as they say was history, and the Dow soared 400 points higher to close at 16,350....
... exactly where the Dow Jones surged to moments ago, 14 months later.
Fast forward to this morning when as we showed earlier, the familiar pattern of "selling the rip" appeared and stocks, especially the Nasdaq, were in free fall when Bullard once again spoke. What he said basically suggested that for the Fed, current energy prices are too low, and thus unacceptable. To wit:
- BULLARD:MKT INFL EXPECTATIONS BECOMING 'WORRISOME'
- BULLARD: OIL PRICES UNDULY IMPACTING MKT-BASED INFL EXPECTATIONS
- BULLARD: FURTHER OIL PRICE DECLINE DELAYS INFL STABILIZATION
- BULLARD: IF OIL STAB AT $20 IN JUNE, WON'T REACH 2% TIL MID'17
And then this:
- BULLARD: HAVE TO HIT A BOTTOM ON OIL PRICES 'SOMETIME'
While not as explicit a warning as his October 2014 "QE4" hint, algos quickly read between the lines, and realized that if the Fed were to escalate a line of though in which only low oil prices are preventing the Fed from achieving its energy mandate, then it is quite possible that the NY Fed trading desk would simply enter the energy market, and push oil to the "appropriate level."
To be sure, we joked that Bullard bailed out the market again, but as of moments ago it is no longer a laughing matter because in a note released by Jefferies' economist Thomas Simons, it was the Bullard comments that were again laid out as the catalyst for the ramp.
According to Simons, while Bullard had been "quite hawkish recently", his comments today "represent a significant turn in his opinion." Jefferies adds that "Bullard is acknowledging that risks to higher inflation are quiet low given the recent developments in commodity markets."
Jefferies concludses by saying that comments suggest that FOMC’s 2016 voters "might not be quite as hawkish as we thought."
In other words, Bullard may have just hinted at the first Q(ommodity) Easing.
So does that mean that the Fed is willing to sacrifice its last shred of credibility to support and prop up commodities (read oil) and thus stocks? We don't know, but we do know that there is an uncanny resemblance between the market's action before Bullard's October 2014 "QE4" comment, and the market over the past few weeks.
But the real question is what happens next, because if October 2014 is any indication then we are in for a massive "rip your face off" rally as the market once again prices in another "Fed intervention" round.
... unless of course Bullard once again "misspoke", or worse, the Fed is now shooting VWAP blanks.
If it is the latter, then watch out below.
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Jesus fucking Christ! Can someone just make sure none of these fuckers are able to open their mouths ever again!
Despite Bullard, we will finish deep in the RED yet again today. Many here on ZH were right, Bullard just bought time for his banker and Wall Street friends to sell and get the hell out of the markets.
I think I'm with you on this one. Every rally has been faded since the beginning of the year. This one's looking a little fade-ish, too.
Now, if we had Gartman chiming in that he's turning bullish we'd have proof positive that we're right.
Euro close ramp commencing now. Need to see if it fade first.
too soon junior
If Only Mom and Pop Retail would Jump back in....
Mom and Pop are stacking beans buying rope and sharpening that old Pitchfork.
The only thing mom n pop be doing is waiting for the social security check.
Uh you do know right that social security is taken out of a persons pay, before they give you part of it back.?
No, they take it out of a working person's pay to give it to a non-working person, and then when that working person becomes a non-working person, they find another working person to take it from to give to that non-working person, and so on (until there aren't enough working persons, and then the whole thing implodes).
No, they take it out of a working person's pay and steal borrow it.
I've attached running boards to my pickup with pitchfork holders so you can just snap it in place and jump in the back. Worse than an umbrella in a crowded room. "There they are!", "Get'em!".
Fed stimilating industries:
and who said that the Fed's actions weren't stimulative to the economy?!
These criminals will have their Mouselini moment, God willing, when these disasterous policies finally fully destroy the economy and the American way of life
Criminal. Rip out his fucking tongue. And then hang him for everyone to see.
Stocks were NOT in freefall. They were headed straight for the neckline of a Head & Shoulders Pattern that dates back to April 2014. Naturally, they're going to defend that level!
I'm not defending Bullard. The whole thing turns my stomach. But, look at the charts and you'll see it's pretty obvious.
http://pebblewriter.com/are-you-happy/
Bullard Bands = Nooses made from tire inner tubes
It only shows that when they bring in Bullard at the right moment they are still following Alan Greenspan's philosophy of "The Stock Market is Everything". Somehow The Fed is still fixed on this idea like its' heroin.
Why didn't the circuit breakers break on the upside?
Whoopee shit. When prices are falling, they invariably find a bottom at some point.
Just like when prices are rising, they eventually top out.
I appreciate the warning and ZH looking at the case for a rally for a change.
But this seems just too much of a stretch to interpret his comment about oil as opening the door for QE-to-buy-oil. That's would be an extreme measure, never on the Fed's radar to date, and contrary to its current mantra that everything is awesome.
Oil bourses are rigged also by friends of the Fed,yes their malfeasance can extend to oil using proxy money and shennanigans
Here's an idea. Buy up all that oil and ship it to ISIS so they can resell it through our puppet, Erdogan. Double dipping and funding our next GREAT enemy at the same time. Winning! /sarc
All Fedspeak is designed to be cryptic so the MSM can hang on their every word and put any interpretation they like on them.
Stocks down? The Fed hinted xxxx would happen.
Stocks up? The Fed hinted xxxx would happen.
Why do you think Exxon was up a bit yesterday and up almost 5% today at noon? Not to worry, the smart folks will sell this afternoon or tomorrow.
The hot air trades of last year were rate speculations, oil is a concrete reality the Saudis are already selling oil to asia at $26.00 per barrel Mr Bullard you will only be able to manipulate the oil bourses back over thirty for a few days not weeks.
$26 is what the price was back in the late 90's adjusted for inflation. If we get to 26 now that is the bottom
Many things are cheaper than they were back then. Productivity does that. Oil is different, of course. It has become a wealth extraction device (petro-dollar) invented under the Nixon administration. The only reason oil must stay high is to support the behemoth in DC.
Crack - it's the drug of choice plus you save a lot of money.
vwap hunting homos.
What else would you expect on option expiration week?
The FED always pulls a rabbit out of its hat to save its too big to fail banksters who constantly sell out of the money put options in the equities.
I remember back in 2008 Bernanke lowering interest rates to jack the equity markets on a Thursday during options expiration week.
We are ruled by a bunch of traitorous crooks. There is no denying it.
One more fleecing of the equity shorts, those idiots who still think, in spite of all the evidence of the past decade, that market fundamentals have any relationship to price.
Once those FAZ morons throw in the towel, the *right* people can get short, and down we go for real.
They wont throw in the towel they know the Fed is the market and that they cant second guess it but greed will keep them there to the bitter end also never underestimate collective hiuman stupidity
We all know that at some point in the not to distant future QE4,5 and 6 will be unleashed. There is no other way out. The only question is how and how much.
I'm thinking 120 billion a month for at least 12 months, the only question is when, I'm thinking this summer.
My guess, $167B/month, starting in Oct.
Having studied economics I fail to see how this bullshit is good for anyone. This is sick!
Its certainly not reality. Its text book how society/human nature falters in the end.
No market correction until the FED authorizes it. By the FED I mean the owners of the FED. Can't have austrian economics and effective foreign policy (designed around economy). Hence until Russia and China collapse, no correction.
That's just the thing though... They're Not going to collapse...
I root for the same team, but call it as I see it.
did you think 14 flush mrkt days was going to change 7 yrs fed ejaculation. its chronic asylum masterbation these people..
dont get pissed, look for target trades, easy now..
Nope... these rate hikes have been mandated to occur and there will be little stopping them from doing more. They have realised that all they acheived was to push asset ptices and now they acknowledge that they can't be sustained. So they can either let them crash on thier own, which would be horrible. Or engineer a reduction in prices, like they are doing. I mean give me a break, SPX isn't THAT far from the all time highs.
bullard is designated jawboner. basically there is a lot of malinvestment which hopefully will unwind in an orderly fashion. a meltup in energy would be worse than a complete washout. there are three alternatives, energy pulls the economy into the deflationary vortex, energy melts up resulting in stagflation, or we muddle through and the muddle through part turns on the presidential regime, and the fed has wisely stepped aside. if the oligarchs cant agree who should run the economy for the benefit of the 1% then we crash again. give the devil his due, he can have 1% of the sinners, dont you think? the rest of us can muddle through
As the Great Lord Humongous once said:
'Look around you - this is the Valley of Death...'
Given the pace, importance and volatility of events, do you really think that 'muddle-through' is what's on the menu for the next 12 months...?
market will stay put until 2017, trump will get elected and in his 2nd year the economy will collapse
buffets put options on major global indices expire in 2017
according to plans...
The 2s and 5s are not fully cooperating yet, with the ramp. They chose PMs to slam, their a little easier to control than bonds,and the dollar; we will see how it works out. As I write they are selling 5s,
test
-icle
If whatever they do works (like it worked (more or less) in 2014), then the trend will change. Small caps will tell me. The trend is my friend.
Paper gold doing its best to say "former". USDX struggling to agree, though.
QW infinity until WW3 starts
Stick save and a beauty!