Was That Patient or Patience?

March 23, 2015

Weekly Market Outlook

By Keith Schneider

outlook20150323The equity markets, gold, treasuries and the euro all roared last Wednesday after Yellen removed the key word “patient” from the Fed plans. This was of course the exact opposite of what Mr. Market expected. For weeks the market was waiting with bated breath for the Feds next statement and had assumed a defensive posture awaiting the Fed meeting. The next big move was going to be determined by one thing. Will the Fed remove the word “patient” from its game plan and start raising rates enough so you can actually see them on a chart? It got what it was dreading but reacted in the opposite direction.   This begs the question, should the market be a patient (or maybe its players) in a psychiatric ward for reacting in the way it did?  Maybe or maybe not. What was of course added in was other verbiage that sent the market on its upward trajectory, which is a slowing economy fighting a high flying dollar and deflation led by oil.

On the Geo-political front Putin re-emerged after a sabbatical and  came out in true form, calling for massive military exercises and moving his nuclear chess pieces forward. It is a clear message to the west. Russia even threatened tiny Denmark about the perils of cozying up too much to the west militarily.

The global macro picture has certainly shifted a bit with the assets we pointed out being overdone last week bouncing nicely. Even Putin got some relief as both Gold and Oil rallied, lifting even the Russian Stock market.

The market for now seems in high gear led by the IWM (Russell 2000) which hit all time highs. Keep in mind that large moves after a Fed meeting lead to weeks more of continued upside but the party often ends badly.   In unusual times such as these the charts tell all!