Is The Puppeteer Ready To Pull The Strings Again?

Bloomberg News reported today that Federal Reserve Bank of Boston President Eric Rosengren may be less dovish than Wall Street investors currently believe. In a speech delivered in New Britain, Connecticut today, Mr. Rosengren said “The very shallow path of rate increases implied by financial futures-market pricing would likely result in an overheating that necessitates the Fed eventually raising interest rates more quickly than is desirable, which could endanger the ongoing recovery and continued growth.” It is noteworthy that Rosengren is currently a voting member of the Federal Open Market Committee, which meets again 8 days from now to plot the path of interest rates and monetary policy over the coming months.

While an interest rate hike at the April FOMC meeting would come as a complete shock to the marketplace, it can't be ruled out. At a minimum, traders and investors should probably begin to adjust their thinking regarding the Fed's current dovish stance on short-term interest rates.

One of the FANGs was crushed after the closing bell today. After reporting weak subscriber growth, Netflix (NFLX) fell about 8% in extended trade this afternoon. Analyst downgrades (after the fact) can be anticipated here, and even lower prices for NFLX stock can be expected over the next few weeks.

In the interest of full disclosure, my allocation to the U.S. stock market right now is 60% short total assets under management. My short position is entirely held in the S&P 500 "Double Short" ETF (symbol SDS).

Could this be another year that U.S. stock investors will be best served by listening to the old adage "sell in May and go away"?