The leak was that the US Government will now start paying people’s mortgages. I am not making this up.
It is clear that each policy leak is but one more desperate stab at propping up the stock markets for just one day longer…
Look at how the markets reversed from key support levels on this “news”.
The NASDAQ 100 ($NDX) traded right down to the 50-day average (Blue Dotted Line) and then bounced 3%+ in the last hour of trading. Notice how NDX traded down to and held the 50% retracement level (Black Line) of the Jan 21 – Feb 9 Rally.
No rumor and the rally is over for the NASDAQ.
Look at how the S&P 500 had broken key support (Green Line) and the uptrend from the Bear Market Low of December 23 (Red Line). The markets were toast today, until the rumor came out in the last hour.
But the rumor came out, and the traders on CNBC cheered and the trendlines were recaptured and all was well on the CBS Evening news, as they could report that the Dow only closed down about 6 points.
Do you see why I’m not shorting stocks any more?