Well, as we assumed on Tuesday night (http://mogharabi.blogspot.com/2013/06/update.html), Mr. Hilsenrath went to work and published another great dovish article to help everyone relax a bit. The result is today's huge turnaround with the S&P 500 jumping nearly 1.5% and closing at 1636.4.
Hilsenrath's article heading says it all: Analysis: Fed Likely to Push Back on Market Expectations of Rate Increase. (http://blogs.wsj.com/economics/2013/06/13/fed-likely-to-push-back-on-market-expectations-of-rate-increase/?mod=WSJ_hpp_LEFTTopStories)
Although such a move was very easy to anticipate, as we did, we must ask who (or what group) knew exactly when Hilsenrath was going to publish this? The market jumped before the article came out, and one cannot say it was driven by the 'good enough' economic news. Whether it is economic data or the publishing of an article by an 'influential' 'journalist', the ones that get the info first always win.
From a technical standpoint, MACD turned up a bit today, so the upwards trend, which has been in the market since mid-Nov. '12, has not changed yet. Slope of the regression line increased slightly, moving the latest linear regression level to 1619.9, from 1617.
In addition to Hilsenrath's article, a miss in tomorrow's PPI, industrial production, or University of Michigan consumer sentiment could further taper the talk of tapering, which could push the equity market a bit higher. No one wants good economic data! So it is not too difficult to realize that the market remains very dependent on the Fed.
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