Massive Price-Volume Divergence and Mean Reversion in Stocks on FOMC Policy

The market continues to trade against the trend with persistent dip buying. We see massive price and volume divergence today with more net selling in the futures while prices are actually moving higher. This can be the result of a long term trend change.

The perma bulls continue to call dip buying opportunities. Since 2009, the Fed has made it easy to buy to dip and be a perma bull with its easy policy. We have had a significant sell off and the Fed has barely started to tighten monetary policy.

Its possible the Fed could reverse towards easing but with higher inflation, it is a difficult step to take.

The market should sell of more here but with excess liquidity still in the system, the bulls continue to step in with massive efforts to prop up the market. I don't think they can do that forever with continued quantitative tightening. So many fundamentals are considered but 99% of the trend continues to be the Fed.