Markets pulled a sudden reversal as members of the Fed came to the sudden realization that stocks are now “too high.” Apparently some of them may have slept through the last decade (or 2 or 3), or perhaps the influence of the roaring bears on the late night $SPY stream is finally starting to creep in. Before adjusting national monetary policy based on their new-found discovery, those Fed folks may want to review O’Neil’s market philosophy in that “what seems too high usually goes higher and what seems too low usually goes lower.” Or they may want to forget about price altogether and focus on volume. As far as HG, today’s low may indeed go lower on Thursday (Next Day Move: DOWN; based on the coefficient of variation from closing market data going back to ’00), but as long as across-the-board distribution days like today stay few and far between, the market will indeed continue to go higher in the long-term. -MD
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