The financial universe is quaking this morning over Bernanke's latest comments that suggest QE3 may be in the works. Recall that "communication tools" make up 50% of the Fed's remaining bullets, as admitted by the B Man himself. The markets are not an algebra problem. At some point there is the very real possibility that the need for further QE will spook the market.
For now though, all looks well. But the market was already saying so last Friday with its corrective patterns. So while it looks like B and his designer beard are moving the markets, the markets were ready to move anyway.
Where do they want to go? I'm watching two numbers: 1407.75 and 1399.18. It looks like the market will indeed open higher. If it extends to the 1407 area but then comes back under 1399.18 I will begin to assume that the S&P has then corrected some sort of sloppy impulse down with a 3-wave rise. Ideally, if the market gets to 1407, it should be primed for new highs over 1414. Any hesitation in the form of an overlap of 1399.18 should be seen as a warning at this stage.
Excellent summary.. thank you. When I saw futures this morning at 6AM PT my first thot was, Who let the QE out? Then I read that the Wizard had spoken.. Ha! on the market not being an algebra problem. : )
ReplyDeleteThanks for the great comments and for reading too. Love your Wizard term. Very funny. :)
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