S&P 500

Just at the market began its torrid ramp higher today at 11:15 am on the dot, something else was expected to happen: the Fed's open market buying, or POMO, of Agency MBS (yes, those still continue despite the end of QE because the Fed has to keep the level of its balance sheet flat and offset maturities).

Only today this did not happen. Instead, this is what the NY Fed said:

Wed, February, 24, 2016

 

In recent weeks Bank of America's new chief technician Stephen Suttmeier has been surprisingly bearish, predicting that the rally is over, as Tom DeMark cautioned yesterday, key support levels are not defended in which case the S&P 500 is looking at a substantially greater drop. Today, his skepticism reached new heights, when he warned that should the failure to break out higher persist then the market is facing a drop to as low ast 1575-1600, something which even Goldman now agrees with.

Below is an excerpt from his latest attempt at a diplomatic guide down:

While the prevailing dour (or perhaps sour) overnight mood was a continuation of the weak oil theme which started yesterday after Iran said the production freeze proposed by Saudi and Russia as "ridiculous", and Saudi oil minister Al-Naimi said that Saudi won't cut supply and that high-cost producers need to either "lower costs, borrow cash or liquidate” (ideally the latter), risk sentiment was further dented when BOJ Governor Kuroda says he won’t target FX rates or stocks, which is clearly nonsense, and further spooked Japanese asset prices (Nikkei -0.85), while s

Yesterday we explained why according to Bank of America, despite the big equity squeeze Treasurys refuse to move lower, and in fact have continued to drift higher in price. We also noted that according to a Reuters blurb, Guggenheim CIO Scott Minerd said on Monday that he sees the 10-year Treasury note yield falling to 1 percent, perhaps even lower, before year-end.

Below are key excerpts from his just released argument for why the best trade of the year will be to buy 10Years in May, or any other month for that matter, and go away until December 31.

The S&P 500 is three trading days from reaching "trend exhaustion," according to infamous technical analyst Tom DeMark. "The foundation of the ongoing rally is suspect," warns DeMark, noting that if the market closes below these key levels in the next three days, DeMark warns "the decline is going to be sharp."

As Bloomberg reports, a top in the S&P 500 would also be confirmed should the S&P 500 finish below 1,926.82 on Tuesday, or close less than 1,917 on Wednesday or Thursday, DeMark said.