Random Walk Trading.com
Tuesday
March 17, 2015
1-855-RWT-0008
TM
Prepared by the good people at Random Walk, LLC.
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Closing Prices From Yesterday
The Fed Meets On Tuesday and Wednesday
and Announces on Wednesday
Today’s Number(s)
Yesterday and Today
Yesterday
The Dow ran up 228 points while the SPX ran up 27.79 after the release of some negative economic reports before and during the day. Good news is bad, and bad news is good. It all comes down the traders not wanting the Fed to ween them off the low interest rate nipple.
During the day TSLA announced they have a car that will go 4 hours on a charge, and BABA announced they are going to do face recognition technology for point of sale transactions.
It almost feels (hard to quantify) that a collective sigh of relief came when the Euro was up, and a pervasive sense that Yellen was not in a position to raise rates until later in the year.
I never felt Yellen was going to raise rates in June ā even though she would like to.
REMEMBER what QE is suppose to do. The objective of QE is to create inflation in a specific asset class. In 2008 housing started to fall so we were adding liquidity to prop up the value of housing. But QE is not a laser guided missile. I can end up raising commodity prices (gold, grains and oil are lower).It can raise up housing prices (the original intent). It can raise up the stock market (which I what happened).
Once started it becomes a balancing act of standing on a razor. Falling to the left creates disinflation/recession/depression. Falling to the right is hyper inflation. We have almost no economic growth and almost no inflation (other than food costs). So right now we are balancing on the sharp blade, but there is only so long our sensitive feet can handle this. We can not stay here forever, but while here she can’t raise rates just because a lot of people have part time jobs at Starbucks.
TODAY
It really all comes down to tomorrow when the Fed announcement comes. Today we have some building numbers being reported that could cause a little chaos, but they are not real big numbers. I doubt today will be as nutty as the previous week, but one can say that both the bulls and bears are pretty ardent right now.
Coming to a Home Near You!
Keep in mind that this is likely not going to end well. Quantitative easing has happened in the past, and it almost always came with as many negative consequences as the original intent tried to avoid. Yet this time it is a different story. The whole world is doing it, and at unprecedented levels. The ECB, for example, is buying more bonds than exist. The US had $4 trillion on its books. The question is when does the hatchet fall? When does the selling come that causes redemption, that forces more selling (to pay for those redemption, which causes more selling?
POT is held each Wednesday night at 7:00pm eastern.
A separate update is coming. Stay tuned !
Contract the office at 1- 855 ā RWT ā 0008 for more details.
Too True To Be Funny
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Attorney Stuff
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Trading is almost as much fun as black jack in Vegas, but without all the annoying distractions of free drinks, Broadway shows, gorgeous people with low morals, and free buffets. It also has about the same odds of success, so when you lose all your money you wont have to walk past a smiling pit boss. Even Bruce Wayne lost everything with options in The Dark Knight Rises, and Superman keeps his day job at the Daily Planet newspaper.
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