Momo Trusts Walk Back

Please click here for a chart of Nasdaq 100 ETF ().

Note the following:

  • April ISM Non-manufacturing Index came at 62.7% vs. 65% consensus. This is a leading indicator.  Even though the number came less than the consensus, it is still a very strong number in our analysis.  However, the momo crowd reacted to the number by buying.  Momo’s reasoning is that the weaker number backs up Yellen’s walk back on interest rates.  Yellen’s walk back literally means that even if the economy overheats and inflation rises, there is no need for the Fed to act.