1993, We Love You, and Now the Super Sweet Spot to Close the Case
The Bounce to 1993 in the S&P index is the gift bounce for which we have been hoping since the 1812 area held on the last decline.
The employment report today showed that the shuffle economy is in full force. It is said that 70 percent of our economy is the consumer. So we see job increases in areas moving money around rather than in real growth. That is the dilemma of the FED, they have harped on the fact that they are data dependent, ie employment and inflation numbers. Employment number data points to a continued move to a normalized FED Fund rate in the 1.5 % area over the next 12 months.
This will continue to be bullish on the dollar and it is sitting in a great support area waiting for info, stocks are overpriced and you have seen the bounce, March T-Bond futures should test the 160 area.
As to the FED raising rates, I would say that there is a 80 % chance as long as the 10 day average on the S&P stays above 1903, if the average moves up to 1953 or higher level the chance of a raise goes up to 90 %. Today the average is around 1920.
Super Sweet Spot
The active defense going on today by the Bulls should provide a real Super Sweet Spot to sell the S&P between 1993 and 2019. This also will move the probability of a rate hike in March almost to 100 %.