They hang on every word parsing this that and another thing. Overall the Fed has become too important since most believe they have little ammo left to stimulate much of anything for investors and the economy. For many, including the financial media and MSM, Fed announcements have become a crutch for feeding the bullish beasts. I’ve often wondered why are Fed governor’s making so many speeches? Do they lack confidence in their policies? Or are they just trying to manage markets but not the economy?

Wednesday featured more BS from Janet & Co stating “…employment data continues to improve”. Really? I suppose hamburger flippers and other part-time jobs qualify for that assertion. Further overseas markets are now seen “…POSING RISKS TO OUTLOOK.” For the latter to be true you have to swallow hook line and sinker China economic data as legitimist and not phony.

Even Alan Greenspan suggested the other day that the point of QE was to drive up PE’s for the markets. That’s a blunt admission long denied by the WS status quo.

Markets were able to rally led by ongoing rally in crude oil despite conflicting data as Tuesday inventory build was wiped out by Wednesday’s inventory draw. The dollar weakened once again allowing other commodities to (precious metals and so forth) rally. But sharp drops in tech (Apple (AAPL), Twitter (TWTR) and previous declines in Microsoft (MSFT), Google (GOOGL) and so forth keep the sector down). It was surprising that markets overall were able to rally given Apple’s heavy weighting in most indexes didn’t impact as much as one would think.

Let’s remember, economic data remains mediocre to weak and so too are earnings. All this used to matter to markets but evidently not these days as we enter a new market experience given supportive stock buybacks funded by corporate debt now in a bubble. 

Stocks fell early on the news but rallied later. The old hackneyed maxim regarding Fed meeting policy releases remains true this day: “The first move’s the wrong move” as stocks fell early then rallied.

All that negativity aside, my job is go with the flow, and that’s still bullish so we stay reasonably invested.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

Volume remains light as only algos remain in the game. Breadth per the WSJ was positive. But I’ll add stocks aren’t cheap. The trailing PE for the S&P 500 is 24.1 which is very high.

Chart Of The Day

Markets are extremely overbought (high PE’s, McClellan Summation Index and etc) make entering new positions at these levels seemingly risky. But that’s the way things are going in the central bank managed market.

Let’s see what happens.