Powell ain’t Yellen, by the Northman Trader

The timing of the recent stock sell off was propitious from one point. It came as Yellen exited, so she won’t be blamed, and as Jerome Powell became the Chairperson of the Federal Reserve. You can’t blame it on him, he probably hadn’t found the coffee machine when the plunge began. So nobody at the Fed can be blamed! From the Northman Trader at northermantrader.com:

When police try to solve a crime one of the key tasks is to determine who benefits from the crime. The beneficiary of a crime is not necessarily the perpetrator, but motive goes a long way to narrow the circle of potential suspects.

Who benefitted from this sudden aggressive sell-off aside from anyone who was positioned short?

Certainly not hedge funds that capitulated long in January with their highest long exposure in 3 years literally right before the sell-off.

And certainly not retail that went full balls long on the aura of optimism:

This trend continued right into February 1 following the FOMO train. Remember Ray Dalio?

Now this:

Panic selling with record outflows. In record time no less:

From greed to panic in less than 2 weeks.

People got hammered big time as price gave back months of gains in a matter of days:

That’s a lot of trapped supply and will present a challenge for future rallies.

So benefits from all this? One man. One man in particular:

Jerome Powell.

From his vantage point the timing of all this has to be perfect. Absolutely perfect. And from Yellen’s position it’s perfect too actually. But it is Powell I want to hone in on in particular.

To continue reading: Powell ain’t Yellen

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