WELCOME

Welcome and thank you for visiting!

The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...
please read my full Disclaimer at this link.

Dots

...If the dots don't connect, gather more dots until they do...

Gene Kelly

Gene Kelly
Happy Birthday, Gene Kelly! -- Actor and dancer Gene Kelly (August 23, 1912 – February 2, 1996)

Events

UPCOMING (MAJOR) ECONOMIC EVENTS...
* Thurs. Aug. 24, Fri. 25 & Sat. 26 ~ Jackson Hole Economic Policy Symposium -- (Fri. @ 10:00 am ET ~ Janet Yellen speaks)
* Fri. Sept. 1 @ 8:30 am ET ~ Employment Data
* Mon. Sept. 4 ~ Labour Day holiday...U.S. markets closed...Canadian markets closed
* Wed. Sept. 6 @ 2:00 pm ET ~ Beige Book Report
* Tues. Sept. 19 ~ 2-day FOMC Meeting Begins
* Wed. Sept. 20 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
* Wed. Oct. 11 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Tues. Oct. 31 ~ 2-day FOMC Meeting Begins
* Wed. Nov. 1 @ 2:00 pm ET ~ FOMC Announcement
* Tues. Dec. 12 ~ 2-day FOMC Meeting Begins
* Wed. Dec. 13 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
*** Click here for link to Economic Calendars for all upcoming events

Thursday, September 17, 2015

What Is The Fed REALLY Saying?

Is the Fed really saying that their present economic monetary policy dictates that they treat current economic conditions like they had to in March of 2009 (re: their decision today to leave Fed Funds Rate unchanged at zero to 1/4 percent)?

If so, then what does that say about the health of U.S. banks? Does that mean they're at the same stress levels as they were in 2009?

If so, then one could rationally conclude that the S&P 500 Index should not be trading 1,323 points higher than it was at the March 2009 lows, as shown on the Monthly chart of the SPX below.


The message I'm seeing on the following Monthly ratio chart of SPX:VIX indicates that the current fear level of market participants equals that experienced back in April of 2011, when the SPX was trading at 1364 before it tumbled to 1074 and, eventually, rallied steadily  to reach all-time highs earlier this year.


CONCLUSIONS:

Both, today's message from the Fed and information on the SPX:VIX ratio chart, are telling me that the current valuation of the SPX (at 1990) is far above where it should be. My comments (and subsequent UPDATES) noted in this previous post regarding the SPX:VIX ratio still apply and are worth monitoring over the coming days and weeks.

* Tweeted by BNN's Andrew McCreath September 18th: