Major averages attempted another bounce, this time on huge volume. The NASDAQ Composite finished close to breakeven while the S&P 500 was down about 1%. Both had long lower tails improving the odds of a temporary bottom. Both also retested prior lows with the S&P 500 retesting its October 2014 low. The rally was catalyzed by Fed futures which suggest, given the calamity in global markets, that the Fed is far less likely to hike rates more than once in 2016.
US futures were pulled down overnight by China's markets which have yet to find a floor. While the US Federal Reserve maintains its "no more QE" policy, the odds of central banks around the world taking additional quantitative easing measures is on the rise. China's central bank earlier this week made its most aggressive cash injection in four years into the country's financial system. And today, The European Central Bank's president Mario Draghi, after keeping interest rates steady, said the ECB will review and 'possibly reconsider' its policy stance on rates at its next meeting on March 10 as global market turmoil raises downside risks.
After being down earlier this morning, futures are now up at the time of this writing on Draghi's announcement. Expect more volatility ahead.
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