I think this article sums up where we are in the Market right now:
- Bloomberg – Everything Is Rallying in Unison After the Fed
Markets refuse to trade on fundamentals – Central Banks are all that matter.
- MarketWatch – Buy bonds, buy stocks, sell risk, blame the Fed
Markets are rallying strong for a 2nd day – but if you look at the trends, for the most part – we are just treading water:
The following table is based on the Z Option Market Analysis Tool – which determines if a market is trending by assigning a trending score from -3 to +3. This helps us keep our trading with the trend.
| Symbol | Description | Short Term Trend | Medium Term Trend |
| $DJI | Dow Jones Industrial Average | 2 | 3 |
| SPX | S&P 500 INDEX | 2 | 3 |
| RUT | RUSSELL 2000 INDEX | 3 | 3 |
| NDX | NASDAQ-100 INDEX INDEX | 3 | 3 |
| VIX | CBOE MARKET VOLATILITY INDEX | -2 | -2 |
| /ZB[Z6] | 30-Year U.S. Treasury Bond Futures,ETH | -1 | -3 |
| /ZN[Z6] | 10-Year U.S. Treasury Note Futures,ETH | -3 | -3 |
| /GC[Z6] | Gold Futures, ETH | 2 | 3 |
| /CL[V6] | Light Sweet Crude Oil Futures,ETH | 2 | 2 |
| /DX[Z6] | US Dollar Index Futures | -2 | -3 |
| $DJT | Dow Jones Transportation Average | 3 | 3 |
| XLK | SELECT SECTOR SPDR TRUST TECHNOLOGY SELECT INDEX | 3 | 3 |
| XLI | SELECT SECTOR SPDR TRUST INDUSTRIAL SELECT INDEX | 2 | 3 |
| XLY | SELECT SECTOR SPDR TRUST CONSUMER DIS SELECT INDEX | 2 | -1 |
| XLB | SELECT SECTOR SPDR TRUST MATERIALS SELECT SEC INDEX | -1 | -3 |
| XLE | SELECT SECTOR SPDR TRUST ENERGY SELECT INDEX | -1 | 1 |
| XLP | SELECT SECTOR SPDR TRUST CONSUMER STAPLES INDEX | -1 | -3 |
| XLV | SELECT SECTOR SPDR TRUST HEALTH CARE SELECT INDEX | 2 | 2 |
| XLU | SELECT SECTOR SPDR TRUST UTILITIES SELECT INDEX | 3 | 2 |
| XLF | SELECT SECTOR SPDR TRUST FINANCIAL SELECT SECTOR FUND | -1 | 1 |
Any market showing a 3 or a -3 is trending strongly – and should be factored into any options strategy you are contemplating.
Many of the blogs I read are furious at the Fed right now – I am sure they put money to work (short) – assuming a rate hike. Not to beat a dead horse, but I think the current market action shows why shorting is such a hard strategy to profit from – far easier to hold more cash during periods of over-valuation, waiting for value opportunities to present themselves – think Warren Buffett.
Extra: I found the following article very frustrating, mainly because I can’t imagine wasting money like this – would feel guilty I did not donate the money to charity instead:
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