by Rick Ackerman
Yellen’s talk on Friday was predictably hawkish, but we’ll take the odds if anyone wants to bet that tightening is coming any time soon. Far more likely in our estimation is that the Fed will loosen with a revival of ‘quantitative easing’. Were this to occur, it would almost surely cause stocks to soar. Indeed, this is about the only thing we can conceive of that could power stocks to some longstanding, very bullish technical targets we’ve had out for a while. One lies at 2230.00, a September E-Mini S&P target 62 points above current levels. Although we think investors would have to be nuts to push the futures to such heights in the current economic environment, from a chartist’s perspective the target looks like a lock-up — i.e., a lead-pipe cinch. Typically, our way of playing it will entail taking bullish positions until the target is reached, then shorting the bejeezus out of it, cushioning the entry risk with profits made on the way up. For a front-row view of the process in real time, drop by the Rick’s Picks chat room with a free two-week pass available here.