Chart of the Week: S&P500 (12 months), Fed Edition

As the 12 month chart below reveals, there have been several strong moves off of oversold conditions. Other than the oversold bounce post Katrina, the chatter around each upwards move has involved the expectation that the Fed is (almost) done.


S&P500 12 months, Fed Theory 


Source: Ritholtz Research


What happens as the market comes to realize the Fed may not be so close to finishing?

Stay tuned . . .


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Quote of the Day

“Ignorance is not knowing something; Stupidity is not admitting your ignorance.” 

Daniel Turov

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What's been said:

Discussions found on the web:
  1. B commented on Feb 15

    These dipshits kicked off a slew of buy programs at 10AM right when Bernanke was scheduled to talk. The loud mouth politicians still haven’t given him a chance to talk 20 minutes later. Looks like January 3rd revisited.

    Is that an efficient market? Lord I was born a GAMBLING man….Oh well, the trend is your friend.

  2. Paul Hickey commented on Feb 15

    In June the market rallied short-term and was at the same spot over a month later. Then the other period you have circled (early January) is above where we currently are.

    How can that illustrate that much of the gains we have seen since June are the result of misplaced hopes that the Fed will be finished soon?

    What happens as the market comes to realize the Fed may not be so close to finishing? Thee market has realized for sometime that the Fed isn’t finished, as Fed Fund futures have continually been forecasting that the Fed will keep raising rates.

  3. Uncle Bob commented on Feb 15

    Ignorance can be helped, stupid is forever!

    Half the population is dumber than average, and thay all seem to get in front of me at the grocery store!

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