The Fed is one hot mess

The definition of "Hot Mess" is "a person or thing that is spectacularly unsuccessful or disordered, especially one that is a source of peculiar fascination." This is my view of the Fed as they are not independent nor data dependent but rather only market dependent. For the Fed and Powell to shift policy 180 degrees when the markets start to wobble is an embarrassment. What they have now done is create a mini bubble from the December lows. The market has gone up 20% and now is up 12% YTD but the policy of being patient should be reversed again but they probably won't change this direction. Tomorrow afternoon we'll know more.

I do know that bullish sentiment for the S&P and Nasdaq is 90% for both and this is extreme. This compares with the 4% at the lows in December. The secondary DeMark Countdowns are getting near the 13th day and some indexes and many stocks have already been triggering the 13's. Transports are fading as are utilities after a straight up run.

China trade headlines will continue to serve as "tape bombs" on both sides. "China backs off" "US China in final stages" bla bla bla headlines like this only chop up short term traders. I am still very cautious especially with the extreme sentiment. Take down some risk, raise stops, have a decent % of cash, buy some puts, or short. Markets used to like Fed days but Powell's Fed hasn't had such a good record so even more reason to be cautious ahead of tomorrow.

The PPO Monitor is a proprietary monitor developed to force rank Indexes, Sectors, and Stocks. It ranks top down by strongest to weakest by percentage above/below the 50 day moving average. Shorter term signals can be seen when the 10 and 20 day moving averages turn up (green) or down (red) which often are followed by the 50 day moving average. This is useful to watch for historically overbought/oversold percentage above/below the 50 day moving average. It is non correlated with the DeMark Indicators however we have found upside/downside exhaustion signals often occur when something rises to the top or drifts to the bottom of the monitor - increasing the timing aspect. We share this monitor with clients with Bloomberg Terminals. An added feature is that each market/ETF can be expanded with each component force ranked in the same way. A couple other features include price deviation from intraday VWAP (useful for intraday reversals) and new 20 day highs/lows on right side. Please inquire if you would like to be permissioned to use the PPO Monitor.

Today's highlights: Before and after the China walking back trade. One of the reasons I use VWAP to spot early weakness and strength

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