The market rallied over 1% on Friday on a much worse than expected jobs report. And, I had a financial television show on in the background after the close, and I heard the host state the following after the rally made no sense to him:
Now, I am quite sure that there are those that can spin the news on Friday to substantiate and attempt to explain the 1%+ rally on Friday. But, a reasonable person must come to the conclusion that such an explanation is akin to scratching your left ear by using your right hand and going over the top of your head.
The market action over the last year then led the analysts basing their prognostications upon interest rates to speculate that the rally we have seen since the October 2022 low was due to the Fed’s intention to lower rates. Yet, the market has rallied 1700+ points and there is no rate cut in sight. In the meantime, I want to tell you that I am on high alert for a potential 25% reversal in the market to the downside. Now, before you get all excited, please recognize that I am not saying this move will certainly happen. I am simply saying that the market has now moved into an environment during which such a move can develop.