Thursday March 16, 2017
An old adage has that investors buy the rumor and sell the news. In the 1980s as interest rates came down, the market would bid bond prices right up to the day the FED cut rates, and then the market would sell off. So the market bought the rumor of a rate cut and then sold on the news.
It works the other way as well. This last week the markets were selling the rumor, the DJIA jumped 300 points and then retraced filling in the gap. On the FED announcement yesterday, the market bought the news.
DJIA
If the market follows through to a new high, the rally will likely last a while longer.
Interest Rates
Rates rose right into the FED announcement and the dramatically dropped, more evidence of selling the news.
Utilities and REITs rallied.
WTIC
The media has noticed crude oil has been leading the markets down. But crude bounced nicely as well yesterday.
Natural Gas
This week the WSJ ran an extremely negative front page article on natural gas. It was so negative it reminded me of the articles a few years back
declaring nat gas would have to literally go to zero to work off the surplus. But natural gas bounced as well yesterday. And it has put in a higher low on the charts.
Weekly Natural Gas
The weekly chart looks like it is setting up a bottom or at least another attempt at taking out the last high.
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