Fascinating action today.
The market actually surged when 2 economic reports that were weaker than expected were released mid morning – consumer confidence was weaker than expected, and a 6 month low. At the same time factory production fell 0.4% versus expectation of 0.1% growth. Again, the market jumped on these numbers. Why? The now familiar "bad news is good news" because "the Fed must act" thesis.
Meanwhile the volatility index is spiking, and U.S. bonds are rallying WITH the market rallying.
The S&P jumped to 1337.5, right below that key 1340 level. But under the surface there are some very strange things going on.
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