What markets are giving us clues that this line will resolve in a breakout (higher) in stocks?
Yields, gold and the dollar.
As of today's close, Powell's speech and Q&A session yesterday has triggered more than a quarter point drop in the benchmark 10-year Treasury yield. This is now 85 basis points off of the highs of October.
Related to this, the dollar looks very vulnerable to a much deeper decline (this, after already falling 8% since late September).
And gold has been on a tear the past 24 hours. Gold has now bounced 11% from the lows of just weeks ago.
What have these markets been telling us since putting in respective highs (dollar and yields), and lows (gold)? The Fed will be forced to take its foot off of the brakes. And that's what Powell indicated yesterday.
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