Market jawbones on political laced commentary re: inflation denial. Based on fears of the Republican's/extreme right wing coming back via Mid Term elections for another swing.

The S&P 500 pieced through its support of 3692 (Chart 1) in an astounding reinflation or reflation trade (which ever way you want to look at it) based on two things and one is not because the markets are over sold, bank earnings were solid (as you would expect re: higher rate margins) which did indeed cause the market to rally holding above the 3692 support (20th Oct.  Light green horizontal line), only to collapse through the support once tech earnings showed up how fundamentally bad speculative reliant stocks have become, due to inflation and rising costs.   So, why did rally it rally?

1st.  Is Wall Street trying to coerce the Federal Reserve into its so called "pivot" to which San Francisco Fed chairperson Mary Daly said on the day of the market rally that "It's time to start talking about slowing rate hikes"  which was juice for the High Frequency Trading systems, hence the short covering and then the piling up on stocks into long positions.   With inflation at a 40 year high and energy inflation about to rip through an American winter,  One can either pay more on one's mortgage and pay less for food (higher dollar, more purchasing power) or pay more on your mortgage and pay a lot more for your food.  Which will it be?  You can't have both. 

2nd.  The worst comment, although politically motivated, but the market liked it, was by U.S. Treasury Secretary Janet Yellen who claimed that "Inflation is not becoming 'embedded' in the economy", also was said on the day prior to the rally.  

Of course, these comments that juiced the market up over 2% were probably unintentional jawboning, yet they show the seeping denial of how bad economically not just America, but the world is in; and that inflation is very much embedded, evolving into a severe form of stagflation.

A good example of this is the U.K. that is ruled by a very conservative/'consumption first, everything secondary' society that is pretty much bankrupt (refer to its currency and dysfunctional bond markets).   And to think this fool want's to come back as PM again?  

And then again, so does this guy. The denier from hell.

We're in trouble.

Be wise.