It's clear the Fed is protecting this market while it continues tapering. I'm wondering if they aren't going to manufacture a runaway move that could last through most of the year and then crash near the end of the tapering (all runaway moves end in a crash).
gold down big
ReplyDeleteYes, does this alter the gold view? SMs up = good cover for a dump in gold.
ReplyDeletewhat's the point of the FED protecting the stock markets temporarily if this is to have it crash later?
ReplyDeleteThe Fed is not trying to protect the markets, the stock market is where the money is going that they are printing. The banks, brokers, and other big institutions park their new free cash there until rates start to rise. Once rates rise, they pull it out, and booooom crash goes the stock market.
DeleteI would argue that it is very important for the fed to protect the market. They've invested trillions in this Keynesian experiment. Just look at a long term chart. The market hasn't corrected back to the 200 DMA in over a year and a half. That's not a normal market. Now that they are trying to exit QE they don't want a repeat of 2010 & 2011. So they are going to actively intervene in the markets to try and prevent that from happening.
Deletewho (what) make the rates rise?
ReplyDeleteI am seeing 2-4% drop by next week for the market.
ReplyDeleteIf Draghi doesn't do "something" for the European economy, the market is going to have a bad reaction. But he can't do QE unless they rewrite the entire EU charter. So, what's he going to do? We don't know. But at these lofty levels, if they don't get something out of him, we could be in for a sharp fall.
The market needs to have a normal daily cycle correction next week. If it doesn't happen then I'm going to assume that the fed interventions may have triggered a runaway move. Those are very dangerous patterns as they always end in a crash. And one never knows ahead of time whether the runaway move will last a few weeks or multiple months.
DeleteInteresting how far gold's parabola got above its MA. Maybe there's further to go on the downside there too.
ReplyDelete