Mike
08-16-2013, 09:08 AM
IBD placed the market in correction after yesterday's sell off. The MEM had three sell signals: S4 additional full distribution count, S5 close below the 21-day, S6 Overdue break below the 21-day. This last sell signal double counts the break below the 21-day because when the market trends a long time above the 21-day a break is usually bad news. We only needed one sell signal to place the market in correction. We now await a new follow-through day to reenter the market. I still remain in TSLA and ACT which will be held unless they succumb to the market downwash.
It is possible that the FED has lost control of interest rates. This has to happen some time and maybe it is upon us now. China and Japan have been selling treasuries where they used to be buyers. The FED may be the last buyer of consequence. They are probably trapped into continuous QE which will in the end monetize the debt. I guess this is why the precious metals are rallying. In order to fund the government either we need our own austerity movement to balance the budget or the Treasury needs someone to buy its debt. Given the political realities you can figure out what is going to happen. My guess is that President Obama is firing Bernanke because Obama doesn't like the tapering talk and wants someone who will obey orders. Perhaps we are headed toward another fiscal crisis.
This quote is from an obscure Treasury publication: http://www.prisonplanet.com/us-treasury-finally-admits-the-truth-its-all-pomo.html
"...we know that between January 2009 and April 2013, on days in which the Fed POMO was more than $5 billion, the stock market rose a total of 570 points, on days in which the POMO was less than $5 billion, the cumulative stock market gain was "only" 141 points, and when there was no POMO, the S&P gained... -51 points."
The cat is out of the bag...
It is possible that the FED has lost control of interest rates. This has to happen some time and maybe it is upon us now. China and Japan have been selling treasuries where they used to be buyers. The FED may be the last buyer of consequence. They are probably trapped into continuous QE which will in the end monetize the debt. I guess this is why the precious metals are rallying. In order to fund the government either we need our own austerity movement to balance the budget or the Treasury needs someone to buy its debt. Given the political realities you can figure out what is going to happen. My guess is that President Obama is firing Bernanke because Obama doesn't like the tapering talk and wants someone who will obey orders. Perhaps we are headed toward another fiscal crisis.
This quote is from an obscure Treasury publication: http://www.prisonplanet.com/us-treasury-finally-admits-the-truth-its-all-pomo.html
"...we know that between January 2009 and April 2013, on days in which the Fed POMO was more than $5 billion, the stock market rose a total of 570 points, on days in which the POMO was less than $5 billion, the cumulative stock market gain was "only" 141 points, and when there was no POMO, the S&P gained... -51 points."
The cat is out of the bag...