The Market’s are like a loaded spring right now, everything
we have seen this week as far as price action is concerned has been in a very
tight range anticipating what the Fed will come out and say on Thursday
regarding QE3. A few years ago when the
Fed announced QE2 November 3, 2010 the market moved significantly higher, then
pulled back the falling week. So in the
event they do announce there is a likelihood the markets will shoot up for a
day or two and then we might finally get a pullback.
Unfortunately I can’t predict the future so I don’t know
what they will do tomorrow, but there is some good evidence they might, such as
slow job growth, the U-6 rate of unemployment is a little more inclusive of the
actual unemployment numbers and is currently sitting at 14.7%. Jobs are by far the
Feds biggest concern, because if jobs are not growing, GDP and the other
numbers won’t follow. So the Fed
believes that by launching another round of QE it can further stimulate, in the
short term, the economy.
So tomorrow is “QE day” and we shall see if the conditions
have deteriorated enough that they will take action.
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