The Gilmo Report

November 28, 2018

November 28, 2018

The market has spent this post-holiday week pulling the melt-up move that it passed on during the Thanksgiving holiday week. This has most resulted in oversold bounces in severely beaten-down leaders, which, in combination with the major market indexes testing their October lows, is logical. I wrote over the weekend that a decent catalyst, either from the Fed or a U.S.-China trade rapprochement could trigger further upside in the market based on this technical condition.

That’s precisely what we got today when Fed Chairman Jerome Powell, speaking at a New York Economic Club luncheon, cooed something about interest rates being very close to what the Fed considers to be neutral territory. While the remark was somewhat subtle, it nevertheless lit the indexes on fire, sending the leading index, the Dow Jones Industrials, rocketing back above its 200-dma on higher volume.

 

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