From Fear to Greed - Powell Sparks 3% Relief Rally Off Second Low

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Published : May 05th, 2022
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Category : GoldWire

"Greed is not good.  Greed is a disease, an aberration of simple honest ambition and necessary provision taken to excess.  This simple distinction may be lost on a people no longer able to distinguish between virtue and sin, honor and expediency, appetite and gluttony, the means and the ends.  

Every great religion, every school of philosophy has cautioned throughout history on the perils of unbridled and unregulated greed.   And yet this generation would make a god of it, although they may not understand, or care, what it is that they are doing, and whom it is they serve. 

Greed, often in company with hubris and fear, is a handmaiden of the corrupting influence of power and triumph of the will.  Greed is contagious, and attacks the very contentment of society at its heart, turning it towards oligarchy and oppression. 

"Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction." 

Erich Fromm 

What the US has today is not market capitalism that predominantly rewards the merits and work of individuals, but rather is the product of dishonest and disordered minds, a system of fraud and plunder by privileged oligarchs masquerading as fair and honest markets of legitimate valuation and price discovery." 

Jesse, Greed Is Not Good, 19 December 2010

"A bounce in the major stock indices at this point is customary, perhaps after some more dithering around.  And let's hope it succeeds at making a higher high.  But if not, we'll always have Paris."

Jesse, Second Lows Are In, 29 April 2022

Fed Chairman Powell sparked a 3% rally in a relatively listless post-decision market by essentailly taking a 75 bps interest rate increase off the table, and suggesting that the bond market was already pricing in the extent of their 50 bps increases for this year.

Powell tossed the markets a bone, and they reversed in a big, big way.

VIX plummeted.

The Dollar dropped like a rock almost 100 bps.   

Gold and silver rallied.

China comes off a four day national holiday tonight.  This may liven up the precious metals trading there.

So the long and short of it is that the stock markets dithered their way to form and test a second low, and then rocketed off that bottom in a relief rally.

Wow, who could have seen that coming.

Let's see how the Non-Farm Payrolls comes in on Friday.  

A weak number may reinforce the dovish stance.  A strong number will not.

And a lukewarm number will just provide another backdrop for  more wiseguys gaming the system.

As the fellow from Goldman was urging people this afternoon, it's time to take those cash savings out of your bank accounts and pile them into the risk markets.

Yikes.

I have marked the place on the stock index charts where bully needs to be to take the CrashTrak model off the table. 

Have a pleasant evening.


 
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