There have been two almost perfect 61.8% retracements since the SPX top with a third one about to wrap up as shown in the plot below (please excuse my crude art work) unless, of course, the third time is the charm and it breaks through. We shouldn't have long to wait to see.
Do any of you guys still remember this button from the Arthur Burns FED days?
Whip Inflation Now. Burns and the accidental president, Ford, thought they could talk inflation down without actually doing anything serious to stop it. The current clueless FED appears to be using the same play book. Over the last two days FED heads and ex-FEDers have been plying the airwaves with all kinds of tough talk about inflation, but they're still holding the "real" FED funds rate to roughly a minus 7 to minus 10 percent depending on whose inflation figures you believe. This dog is all bark and no bite. Instead all this hot air emanating from the FED heads is actually just blowing the bubble bigger. Until they channel Volker, they are as much of a joke as the above button turned out to be. I suppose it's a lot to ask of the folks that started the fire to actually put it out and not just roast some more marshmallows while sitting around the fire singing kumbaya.
Regards,
Douglas