Bad News Is Good News Again

Posted by Lance Roberts - The X-Factor Report

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As you can imagine, my email was flooded last week with a simple question: “Is the correction over?”

While my gut tells me that the answer is most likely “yes,” the technicals still say no.  Therefore, while we adhere to the discipline and maintain current allocations, it is always prudent to question why things are the way that they are.

It was just a couple of weeks ago that the markets were in turmoil over the emerging market issues. Currency spreads went awry, stocks fell, and bond prices surged. Then, seemingly almost overnight, the world returned back to its overly complacent normality of the past year. The question that we have to ask is – why?

The primary reason can be directly attributed to Janet Yellen. Two weeks ago on February 3rd, I wrote an article entitled “Markets Oversold Enough For A  Bounce” in which I stated that the markets were  oversold enough for a bounce.  As shown in the chart below – the 3rd of February WAS the low point for the market.

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