Now that equities are behaving the way they should have since 2013 – volatile with a pronounced down bias – everyone is wondering how far the crazy will go before the Fed starts buying the S&P 500.

Short sellers, of course, want to know when to close out their at-long-last-profitable bets (see David Einhorn
). Cautious investors (see Warren Buffett) with money on the sidelines want to know when to step in and buy. And fully invested optimists (the vast majority these days), are wondering if they should keep buying the dips till the cavalry arrives.

Credit Bubble Bulletin’s Doug Noland has been through at least three such cycles in his career as a short seller, and he’s parsed the testimony of new Fed chair Jerome Powell to reach a conclusion that the shorts will love and the longs will hate. Here’s an excerpt from his latest post: