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.

Comments

[the not so migh...]

They were going to ramp it no matter what..  They wait for the windbag to speak to give them cover

[Thisisbullishright]

Bullard can SUCK MY DICK!!!

[sgorem]

and Mr. Bullshit replies, "you callin that a dick?!?:)"

[MFL8240]

What kind of a country have we become that some clown says the price of oil will stop going down "SOMETIME" and that sparks a 200+ point rally in overpriced stocks with a collapsing economy at home and abroad?  Where the hell are the fundamentals?

[buzzsaw99]

BULLARD SINGS!!:

There's got to be a morning after

If we can hold on through the night

We have a chance to find the sunshine

Let's keep on looking for the light

Oh, can't you see the morning after?

It's waiting right outside the storm

Why don't we cross the bridge together

And find a place that's safe and warm?...

woo woo woo bitchez

[wmbz]

Everyone knows that the un-fed will do QE-4,5,6 etc... NIRP and evey other damn bullshit trick they can come up with.

These fuckers are and will blow the whole "system" sky high!

Watch and see.

[sgorem]

NEWS FLASH!! Cramer is SCREAMING $500 BBL OIL JUST AROUND THE CORNER!

                           Tim Cook SAYS I-PHONE IN EVERYONES POCKET IN 2017!!!

                           JPM, BANK OF AMERIKA, AND GOLD-SUCKS TO MERGE!!!!!

                           VW TO OPEN NEW PLANTS IN 17 LARGEST US CITIES!!!

                           LIESMAN SAYS GOLD TO HIT $1/OUNCE BEFORE 2018!!!!!!:)

[wmbz]

LIESMAN SAYS GOLD TO HIT $1/OUNCE BEFORE 2018!!!!!!:)

$1 Gold! And Silver will be 1/16th of a cent. Cool!

Wonder what the world will look like when that happens?

[Zero-Hegemon]

Just manufacture a war between Saudi and Iran, boom. Oil $150

[ChargingHandle]

Does the fed intend to burn off all the surplus of oil around the world?

[NDXTrader]

Or you know, it could be because it's OPEX week and VIX was going to get slammed even if Bullard said they were hiking rates again this month

[moonmac]

Bull-TARD and the rest of the Fed criminals should only be doing interviews locked up in prison!

[luna_man]

You, should know as I do, MY MAIN MAN, nothing these CRIMINALS, can do to turn this mess around.

just don't stop planning for the inevitable misery to come

[QE4MeASAP]

Bullard Bounce 2.0?  Aren't retail sales tomorrow am?  If so, it makes perfect sense for everyone to jump into market now!

[RopeADope]

I am extremely doubtful that we would be above 1925 S&P for any meaningful amount of time.

[desirdavenir]

Has anyone else considered that Bullard may just be your 101 hedge fund head, just talking his book to the populace ?