At Thursday's close it looked like Friday might be a neutral day and then Bank of Japan announced a massive QE program overnight and a buying party ensued. Although the TrendX (side panel) looks to be topping out the BOJ plan could be a game changer, at least for a while, as we have now broken through to new highs on all the major indices. What's interesting about the BOJ plan is the strategy of buying both bonds and stocks outright. We'll have to see exactly how that affects liquidity (should improve it) and the actual schedule of buying to better judge possible impacts on the markets but for now the prospects are all bullish.
Over at M3 we've booked some nice gains with UPRO, which has been outperforming XIV lately (see charts below).
Also a bit of a head scratcher, the VIX was only down 1% at 15 minutes pre-close Friday and then dropped another 2.3% to finish the day down 3.37%......a piddling drop in the face of Friday's massive and across the board buying.
