FOMC Leaves Rates Unchanged, Turns More Dovish; Wedbush: Stocks Crash If Trump Wins

Stock junkies got their fix on Wall Street today, as the FOMC not only kept the federal funds rate unchanged at 1/4 to 1/2%, but reversed course on their planned four rate hikes in 2016, reducing the outlook to two, which, in the nuanced parlance that can only come from crony central bankers, means one more rate hike in 2016, likely not until September, at the earliest.

Talking heads from the various analyst camps spoke of a potential June hike, though, judging from the Fed's past actions, later, rather than sooner, would be the more likely timing. With US general elections coming in November, the Fed - no longer an altruistic entity, but a purely political one - a September rate cut would produce maximum chaos, which is surely the ongoing plan.

Not to put too cynical a spin on it, but the Federal Reserve has become completely politicized under Janet Yellen, with plenty of assistance and guidance by the mother hens which dominate policy from the White House. Employing high-sounding verbiage and the trappings and aura of majesty, the Fed has managed to hypnotize global markets and US citizens with their incredible blend of experimental policy and garbled, mangled language.

What the Fed has accomplished is nothing more than a furtherance of the ongoing wealth transfer from the distressed middle and lower classes to the uber-wealthy, while shutting out innovation, creativity and entrepreneurial spirit.

In essence, they are the ultimate destroyer of the American economy via globalist intentions and actions.

With their latest salvo of lick-spittle jawboning, they perpetuate the counterfeit of the US dollar and the fraud on savers which began in earnest with the financial collapse in 2008-09.

Stock promoters couldn't be happier, sending the major indices to their highest points since early January. With no impediments standing between them and median price-earnings ratios approaching pre-1929 levels, stocks are poised to completely erase the losses incurred through the first six weeks of the year.

With today's close, the Dow and S&P are within one strong day of getting even for the annum; the NASDAQ has a little more work to do.

December 31, 2015 closing prices:
Dow: 17,425.03
S&P: 2,043.94
NASDAQ: 5,007.41

Today's Fed-jacking:
S&P 500: 2,027.22, +11.29 (0.56%)
Dow: 17,325.76, +74.23 (0.43%)
NASDAQ: 4,763.97, +35.30 (0.75%)

Crude Oil 38.49 +5.92% Gold 1,264.00 +2.68% EUR/USD 1.1227 +1.08% 10-Yr Bond 1.9380 -1.07% Corn 368.25 -0.07% Copper 2.25 +0.94% Silver 15.64 +2.48% Natural Gas 1.87 +0.97% Russell 2000 1,074.51 +0.74% VIX 14.99 -10.99% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.79% USD/JPY 112.5475 -0.53%

In what has to be the #1 hit piece on Donald Trump from the Wall Street crony capitalists - via Yahoo! and CNBC, Wedbush's director of equity sales, Ian Winer (shouldn't that be I'm a Whiner?) says stocks will crash 50% if Trump is elected president.

Here's a link to the article and video (and some easy comments), and if you just want the video, go here!

CNBC, the #1 financial bull--it network, doesn't want to mention that stocks should fall 50% anyhow, and the entire economy will be gutted if Hillary Clinton or Bernie Sanders wins the election.

https://screen.yahoo.com/trump-catastrophic-stocks-wedbush-214000793.html

One of the better comments, by commentator takebreathandthink:

It's true, the markets will crash 50%. Also, the seas will turn to blood, meteors will rain down from the heavens, swarms of locusts will kill all of the crops in the world, every volcano will erupt, earthquakes will rip apart the continents, and the first born of everyone in the world will die (thank God I'm the youngest in my family).

Inquiring minds want to know why Mr. Winer didn't call for a 60% or 80% crash. After all, if you're going to trash someone, why go just halfway?

Vote Trump. Wall Street hates him.

Markets Moribund Facing FOMC Meeting

Nothing matters except the Fed and the FOMC rate policy meeting which wraps up tomorrow.

At 2:00 pm EDT, something will happen, though the Fed is expected to leave the federal funds rate unchanged.

La-dee-da.

S&P 500: 2,015.93, -3.71 (0.18%)
Dow: 17,251.53, +22.40 (0.13%)
NASDAQ: 4,728.67, -21.61 (0.45%)

Crude Oil 36.53 -1.75% Gold 1,232.80 -0.99% EUR/USD 1.1119 +0.13% 10-Yr Bond 1.9590 -0.20% Corn 368.25 -0.14% Copper 2.24 -0.13% Silver 15.29 -1.49% Natural Gas 1.85 +1.65% Russell 2000 1,066.67 -1.62% VIX 16.84 -0.47% BATS 1000 20,682.61 0.00% GBP/USD 1.4147 -1.08% USD/JPY 113.1630 -0.56%

Stocks Flat Awaiting FOMC Interest Rate Decision

Don't expect much in the way of big moves until Wednesday, when the FOMC is expected to announce no change in the federal funds rate, quelling fears of another 25 basis point rate hike like the one executed in December of last year, essentially taking the punch bowl of easy money further away from the drunken Wall Street partiers.

If the Fed somehow decides to hike rates again, it would spell doom for the four-week rally that has brought the Dow back a stunning 1200 points. from mid-February lows.

Should the Fed conform to the dictates of the stock market (which it does, but definitely should not), keeping the rate at 0.25-0.50%, there is some suggestion that stocks could rally further, though, with the first quarter winding down and earnings reports still a month out, that really doesn't appear to be a reasonable probability.

More likely would be for speculators to take some money off the table and go to cash for the short term, await the inevitable dip in selected stocks and dive in once again at some later date.

The wild card is still the Fed, which had promised three to four rate hikes this year, but remains, as they say, "data dependent." Otherwise, this is quite the dull market.

At least crude oil came off its recent highs. Expect the recent euphoria to turn toward a more realistic price, closer to $30/barrel in the near term.

S&P 500: 2,019.64, -2.55 (0.13%)
Dow: 17,229.13, +15.82 (0.09%)
NASDAQ: 4,750.28, +1.81 (0.04%)

Crude Oil 37.34 -3.01% Gold 1,236.00 -1.86% EUR/USD 1.1102 -0.49% 10-Yr Bond 1.9630 -0.71% Corn 368.75 +1.03% Copper 2.24 -0.07% Silver 15.36 -1.54% Natural Gas 1.82 -0.11% Russell 2000 1,084.25 -0.30% VIX 16.92 +2.55% BATS 1000 20,677.17 0.00% GBP/USD 1.4303 -0.53% USD/JPY 113.79 +0.06%

It's a Bear! It's a Bull! No, It's a Blur Market

Money Daily has sought to explain the crooked, maligned markets since 2006, without success, though today, at last, a breakthrough may be at hand.

At last, a definition with which everybody can agree.

After yesterday's quad-engulfing candlestick on the Dow Jones Industrial Average (DJIA), which would surely, under normal circumstances (whatever qualifies as normal since 2008, nobody is sure) qualify as a key reversal day, markets would have none of it, unless one is to be persuaded to believe that the reverse of a constant grind higher is a quick slam higher.

Up is down, Down is up. Slavery is liberty and all that 1984-ish doublespeak. (h/t to George Orwell)

Are we in a bear market? Hardly. A bull market? Doubtful.

Thus, we inaugurate the Blur Market, wherein all fundamentals are obfuscated by statistics, corrupt data from the BLS, manic pumping from the PPT, the machinations of the ESF (Exchange Stabilization Fund), jawboning from the likes of Mario Draghi, Shinzo Abe, Janet Yellen, Stanley Fisher or James Bullard.

It's a market driven by algorithms, unseen by human eyes, throttled up and down by unseen scientists in hidden caverns. The blur market is so fast, microseconds are not quick enough to front-run it. High Frequency Traders (HFTs) fight for nanoseconds of advantage. Didot typefaces print prices in a dadaist diaspora.

There's only one number that matters: 2,130.82

That was the all-time high close on the S&P 500, May 21, 2015. We are just about two months away from that being a year ago, so, are we headed to another all-time high or not?

If we are, the bull market lives on. If not, a bear market is in the cards.

For now, we're in a 'tween market. Not bear, nor bull, but something in between, a 'tween, or a beull or a bulear. Something like that. Maybe we could just call it a blur market, which works on a number of levels.

So, let us. It's all a BLUR.

Friday's massive rise capped the fourth straight week of gains on the major indices. For the Dow, up 7.5% in just the past 20 sessions, Friday's gains put the rally at a solid 1200 points. For the week, the DJIA was up 206.54 (1.21%); the S&P added 22.20 (1.11%); and the NASDAQ posted a gain of 31.44 (0.67%). Friday made certain that the rally did not end, at least on a weekly basis.

While impressive, this looks like nothing more than a cynical cyclical rally, with nothing but hot air and central bank jawboning behind it.

The Friday Blur:
S&P 500: 2,022.19, +32.62 (1.64%)
Dow: 17,213.31, +218.18 (1.28%)
NASDAQ: 4,748.47, +86.31 (1.85%)

Crude Oil 38.51 +1.77% Gold 1,259.50 -1.04% EUR/USD 1.1152 -0.23% 10-Yr Bond 1.9770 +2.49% Corn 364.50 +0.48% Copper 2.24 +1.06% Silver 15.62 +0.49% Natural Gas 1.83 +2.18% Russell 2000 1,086.77 +2.14% VIX 16.55 -8.31% BATS 1000 20,677.17 0.00% GBP/USD 1.4383 +0.66% USD/JPY 113.78 +0.56%

Key Reversal As Dow Candlestick Engulfs Previous Four Sessions; ECB's Draghi To Blame

Money Daily been covering about this rally for the past two weeks but really didn't see the handwriting on the wall throughout. While saying the market would continue to rally at least until the ECB rate announcement by Mario Draghi (today), and possibly Yellen and the FOMC (on the 16th), there was no way to know when exactly it would stop or why.

But, now we all know. It was "buy the rumor, sell the news," all along. Everybody figured Draghi would go all in on QE and lowering the reserve rate (rumor) and he did (news), so, therein lies the reasons for first the pump in stocks and then the midday dump as Draghi then backtracked at his press conference, saying not to expect more over-the-top policy moves anytime soon.

Why? Draghi was giving Yellen and the Fed cover to keep rates where they are, for at least another month or meeting.

The main aspects of Draghi's "bazooka" approach are:
-- The key interest rate is dropped from 0.05% to ZERO.
-- Cut its deposit rate by 10 basis points, further into negative territory to -0.4%
-- The marginal lending rate, paid by banks to borrow from the ECB overnight, was cut from 0.3% to to 0.25%
-- Expanded the QE programme to €80bn (£61bn) a month, up from €60n
-- Expanded the LTRTO, offering more easy loans to Eurozone banks

Then we saw the usual late-day comeback, leaving US equity markets virtually unchanged, on a day that was arguably noteworthy and newsworthy. The markets, the speculators, had all of this priced in, and the gyrations were only to square their winners and losers.

This is the game. It's nothing more than a game, has no root in reality, fundamentals, supply/demand or any other tired metric of what we used to fondly call "analysis."

Markets are nothing more than tools for public entertainment and consumption. The central bankers, so long as they have the power to conjure endless amounts of fiat out of thin air, have complete control over all markets.

Finally, we are beginning to see the light at the end of the tunnel, though it appears to be just a flickering candle about to be snuffed out.

As far as technical analysis is concerned - again, giving the CNBC types and the marketeers sufficient cover - the Dow candlestick chart shows today as a key reversal day, with today's action - up, then down, then back up - engulfing the previous four sessions on the Dow. Interesting also is the pint at which the rally ended, almost exactly at the 200-day moving average. It's almost as if it was planned, though that kind of statement might brand one as a wearer of tin-foil hats and a believer in astrology or Scientology.

These kinds of "outside" reversals almost always signal a change in direction, so, outside of more malignant market manipulation, stocks should head south on Friday and continue in that general direction heading up to the FOMC meeting Tuesday and Wednesday of next week.

Upon the Fed keeping rates unchanged, it will be "mission accomplished" for the time being. multiple flavors of options expire on Friday, so expect volatility heading into the end of next week.

Then again, one could hold real assets outside the system, those being anything raised without the assistance of fiat money (think animal husbandry, vegetable gardening and barter), or the hated precious metals and/or gemstones.

In he end, people use money or currency to buy the things they need to lead free, comfortable lives. If one were to master the ability to minimize dependence on the fiat money system and maximize the ability to produce energy, food and goods, there would be little need for any kind of currency except that controlled by the actual buyers and sellers.

There, the survivalist, off-the-grid types make perfect sense.

Thursday's Round-trip Extravaganza:
S&P 500: 1,989.57, +0.31 (0.02%)
Dow: 16,995.13, -5.23 (0.03%)
NASDAQ: 4,662.16, -12.22 (0.26%)

Crude Oil 37.88 -1.07% Gold 1,271.90 +1.15% EUR/USD 1.1179 +1.64% 10-Yr Bond 1.9290 +1.96% Corn 363.00 +0.97% Copper 2.23 -0.31% Silver 15.59 +1.43% Natural Gas 1.80 +3.03% Russell 2000 1,063.99 -0.82% VIX 18.05 -1.58% BATS 1000 20,677.17 0.00% GBP/USD 1.4282 +0.49% USD/JPY 113.2420