I just came across this funny video on You Tube about Quantitative Easing. Interesting explanation about the FED and printing money to pump into the US Economy. Federal Reserve Chairman Ben Bernanke’s $600 billion quantitative easing program has been roundly criticized around the world. Here is just one example:
Click Here to Watch- Quantitative Easing You Tube Video
What are your thoughts?
On Friday gold touched a new high as the Fed prints more money, yes another $800 Billion so the US Dollar continues to be worh less and less. Hence why we see Gold breaking to new highs investors are flocking to some other form of security as they worry about how much paper money is becoming worh less each day.
It’s not only Gold breaking to new highs Silver and Platinum are all breaking new highs yes precious metals are being consumed globally so the rally is on where will the top be many say 2,000 on Gold I tend to agree some say $5,000 we will have to wait and see.
it’s not great at all, but markets rally up in down turns just as they fall in up markets, we need to let the market confirm its long term downward direction before going short these rallies are designed to take the shorts out.
The outlook on the economy is not healthy when you look at the unemployment rate.
Initial claims tonight will be our first way of looking at the outlook on the economy each week, let’s see whether there is a short term improvement or it is worse. Then we have the GDP numbers tomorrow night they are expected to be released at 2.9%, then on August the 10th the FED members meet again to discuss quantative easing which means printing more money, if they do it’s very likely that we will see a similar rally of March 2009 but on a much -much smaller scale.
Another round of quantative easing will be the last tool Bernanke can use to avoid the next leg down in this recession.
If flooding the system with more money fails to lift equity markets, then all hell will break loose in the markets and it will be a perfect time to go short.
By doing this they will have used all their aces up their sleeves as they can’t lower interests rate they’re already are at 0%.
If the S&P breaks above 1120 a retest of 1150-1170 which puts the DOW at 10,700.
High unemployment remains a drag on the economy I have noticed the companies that have exceeded their quarterly earnings have been companies like Caterpillar, United Parcel, and John Deere to name a few companies that have revenue outside of the US.
The stream of earnings news continues to be strong, now that 49 percent of the S&P 500 companies have reported. Earnings have risen an average 42 percent, and 77 percent of the companies have beaten earnings estimates. Sixty-four percent have beaten revenue estimates.
Last night Moody’s changed their outlook on the economy on the bank ratings for Citigroup, Bank of America and Wells Fargo and warned they may need to downgrade their senior debt of several regional banks because now that the US banking system has moved beyond the depths of the financial crisis, the probability of government support for these banks could be lower.
Moody’s has warned that if regulatory reform lessened the willingness of the US government to stand behind our largest banks, it would have to close the ratings uplift gap. By its actions last night, it would appear that Moody’s has now begun that process.
The outlook on the economy in the commodities market of Oil and Gold seem to be bright going forward but at the moment they are pulling back setting up very soon for some nice entry levels to buy into on the pullbacks.
So our outlook on the economy next week looks to be the time to enter some short positions on the Indexes and long Gold and oil.
Dear Fellow Traders
The European economies are now headed into a serious contraction; China is purposely slowing its economy down to try to control a huge real estate bubble; the Fed is slowly withdrawing liquidity from the market ; the U.S. stimulus package has been spent and, despite some pleas for more, there is no more coming.
(More …)
The Dow popped over 100 points in the final minutes of trading Friday after a yo-yo session and a rocky week.
Whats in store for the future the markets have started their long term downtrend get prepared before you get caught.
Looking at the short term conditions of the market the S&P 500 touched the 200 day moving average at 1,100 to close at 1,115 after breaking another critical support of 1,120.
The next level of support may be the panic bottom on 6th May at 1,060.
There is so much uncertainty and fear in the markets the VIX rose back above 35 it’s in the extreme
high side of the FEAR sentiment out there.
The trillion dollar bailout for Europe hasn’t worked just yet it remains to be seen looking at Spain’s auction on Tuesday they failed short by $1.6 billion in sold bonds; they hoped to sell $8 billion but only sold $6.4 billion.
There are big demonstrations in the Greek unions today and the Spanish unions are also calling for a strike while Germany banned naked short selling on all equities and derivatives and are prohibiting investors from buying credit default swaps on sovereign debt unless they own the bonds. They also banned naked short selling on all the bank stocks.
The four PIGS need to raise 500 Billion Euros this year in new debt the possibility that Greece and other countries will default on their bonds as Germany refuses to put any more bailout money up.
Restructuring the debt the ECB and IMF will buy lots of bonds from European banks to spread the pain everyone else will take. The impact could be that the Euro falls below a dollar remember at one time the Euro was at 87c. If the sovereign debt of the PIGS gets impossible to sell and interest rates rise the ECB may have no choice but to do what the fed did in 2008 flood the banks with liquidity PRINT MONEY.
If the Euro falls so will the pound the yen will rise along with the US dollar and Gold.
Trader Lyn
Dear fellow traders
What is happening around the world:
Let’s look at China, where Shanghai stocks fell 5.1% yesterday and is 26% off the index’s 52-week high. If Chinese stocks are leading the economy, one crash has started and another could be just beginning.
It means that while the pain of a China crash would be sharp and probably not short, it won’t be the end of the world but it will have a profound effect on our exports here in Australia.
Today the All ordinaries have broken below key support of 4500 technically we have entered into the first stage of a bear market.
Markets in Europe and the US were all down as worries over the Collapse of the Euro continue which fell to a 52 week low below $122.
Which make our Short positions in the Euro a home run trade…Oh only a few of these each year and we never have to work again.
My excitement is back I love trading a down market as it falls faster than it rises time to get on board.
If you haven’t got a subscription to my weekly Thursday night 2 hour Coaching and Training webinar where I analyze and break down trading opportunities
Click on this link for a one month trial for $79 http://www.stockcourse.net/special
My Motto: Go the Bears.
See you online tomorrow night for some more exciting trades.
Trader Lyn https://www.stockcourse.net/webinar?af=SC10039212
Bond spreads are widening which means investors are fleeing from risk and not just from equities.
High yield corporate bonds (junk) have had an unprecedented, near-bubble-like run.
It’s ended, and now I think the market is rolling over.
The last time the Fed announced it was buying up treasury bonds they rallied, then the rally failed a week later and broke support and fell hard….Go Short
30 year treasury Bond chart
