FLS: Buy The Rumor, Sell The News ECB Fires A Blank Shot 03/10/2016

It’s a wild day in global markets. Today’s action reminds me of the old Wall Street adage: Buy The Rumor, Sell The News. Over the past four weeks (since the Mid-Feb low), we have seen HUGE moves in global capital markets (Buy The Rumor).The benchmark S&P 500 index soared +11% in 3.5 weeks and crude oil vaulted nearly 50% during that time! In normal non-easy money days, a 10% rally for the entire year in the S&P 500 was considered healthy. So 11% in three weeks is a HUGE move by any normal measure. Crude oil surging nearly 50% in 3 weeks is also a huge move! These are major global markets, not some thinly traded no-name penny stock! That brings us into today’s wild action. Before the open, The European Central Bank (ECB) fired another shot from it’s easy money bazooka. Initially, stocks rallied hard on the news and the euro plunged. That move was short-lived because during Mr. Draghi’s press conference, he said he’s done with easy money…for now and that triggered a HUGE reversal in global markets (Sell The News). The German DAX was up over 2% after the ECB announcement but plunged and closed down -2.3% by the close. That’s a HUGE intra-day swing from high to low. Separately, the euro currency traded all over the map. After an initial (and very large) sell-off, the euro soared from 1.0853 to 1.1226! Again this is a major global currency, not a small penny stock that no-one know’s about. Exaggerated moves (both up and down) occur during bear markets, not bull markets. Right now we are open for anything outcome and know the bank of japan and U.S Fed meet next week, so the central bank madness continues for now. As always, we want to see where the market closes tomorrow and will have a full report for you this weekend. 

A. The service owns: QQQ +4.92%
B. The service will exit: QQQ @ 103.21

 

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