What do we make of this rally? Is it a 2005 Donovan McNabb pump fake? That is, a bear market rally? Or the beginning of a pivot to accommodative policy once more? On Wednesday Jerome Powell said, and didn't say, just enough to prolong a run up in risk assets into the weekly close. Why?
In short, he didn't say anything that was incrementally hawkish. Crack the window open for those itching to go long, and in the short-run, they will pile in and duly vaporize short sellers.
As ever, we resort to charts and lines to settle the case. And in the Nasdaq, we don't yet see a decisive break above the defined down channel that has dominated this year. Best guess? Bear Market Rally. But who can say? And is there a trade worth taking in this milieu?
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