Comment: There is an ultimate reality: Price.

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Michael Nystrom's picture

There is an ultimate reality: Price.

Wow - that was really boring!

Ultimately, her words don't matter. Just a bunch of blah, blah, blah.

What ultimately matters is how the markets interpret those words. That is the basis of technical analysis: That all the aggregated wisdom and opinions of all the market players and non players are distilled down to a single number. Price.

What matters most is the prices of the three assets depicted in the three charts above: The Dow, The Dollar and Gold.

I have no doubt that the Fed and the USG can manipulate the markets, but they can't do it forever. I don't believe they can. The market is bigger than any individual player, including the Fed & USG, even if they combine their considerable powers.

The debt bubble has grown so big, so massive, that eventually it has to pop. And when it does, there will be hell to pay. I know everyone has been saying it forever - that the crash is coming - and it is taking its own sweet time. To the point where people are starting to doubt that the implosion will ever come.

Why did I bother listening to Janet Yellen today? Because it was her first press conference. This is a changing of the guard. Changings of the Guard are always fraught with peril, because there is the chance that something could go wrong.

The Fed is all a confidence game. A con game. Once the jig is up, there will be no putting it back together again.

The market took a dump today. Gold fell, and the dollar rose. How will Ms. Yellen respond? If nothing else, this is a test for her - for her leadership.

Whether this little drop today is just a speed bump, or the start of something bigger remains to be seen. But whatever you do, don't take your eyes off the ball.