Saturday, December 8, 2018

When the price diverges from the news...

The negative market action last week was a clear and unexpected divergence from the positive news the week before (Powell's comment on the interest rates being close to neutral and an apparent tariff deal). There is a trading wisdom that states "if the price diverges from the news -- the price is right".

This all reminds me of September 2008, when TARP was passed, but after a one-day rally the market sold off... I wouldn't be surprised if the SPY support is broken next week...

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