March 25, 2022
Good morning,
Futures are up about a third of one percent this morning ahead of the U.S. cash market open. They spent most of the overnight session under water and mildly in the red. The chatter making morning rounds on trading desks this morning (Bloomberg), is a call for four consecutive 50bps rate hikes by the Fed at their next four (May through September) FOMC meetings. That and other pundits saying the equity rally is unsustainable. In the absence of hard economic data this morning, we’ll register the chatter as still oversold – more worry for the equity market to climb.
I do not have much to add this morning to Wednesday’s note. Except to say that the signals, mentioned Wednesday, calling for a sustained rally in the weeks ahead work best when increased participation follows them in the form of more breadth thrust signals about a month after the initial signal. In other words, the short term indicators have flashed green, for further confirmation, we have to wait a few weeks for the intermediate term signals to join in. So far this week things are going according to plan.
Be well and have a good weekend,
Mike