Quite an interesting session today as volatility has definitely returned. After this morning's gap up, investors seemed disappointed with Bernanke's comments although it might have just been an excuse to fill the morning gap. Then there was a quick reverse up to take the market near highs of the days and the market seemed to be on cruise control for the rest of the day. Instead there was a sharp selloff mid day taking stocks down about 5 S&P points in 5 minutes. Now things seemed to have settled a bit in the mid point of its range. I don't think anything changed today in terms of what is coming down the pike – more easing, but maybe some people think it will not be in September.
Also this is one of those rare days when bonds are rallying along with equities and the close inverse relationship is not holding. Generally one would not want to see this but it could simply be a signal of bond players front running the Fed. All we can see here is the playbook for how to invest has been completely changed by central bank actions the past 3-5 years. So many of the old relationships are nil and defunct.
This TLT ETF has broken back over the 50 day moving average and could possibly get up to fill gaps above.
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