So the Federal Reserve announces unlimited quantitative easing. The market shoots up after it is revealed. The next day we push higher, only to reverse most of the gains. Then today, the markets are slightly lower. Where is the massive catalyst? The Federal Reserve is going to print another trillion Dollars and that was all we got in terms of an inflationary rally?
I am being somewhat sarcastic here. Obviously, the market had already factored the easing into the markets and Wall Street now knows the Federal Reserve has no bullets left to fire at this market.
The markets seem tired and unrest is circling the globe. The Mid East is a mess while China and Europe are in deep recessions. While the U.S. is not in a recession, we are not growing much. With all these positives, maybe the market can go up another 50%.
Bottom line is this: A market that has moved consistantly higher on printing of money is a market I would be very careful with. Ultimately, a crash will occur, probably not until next year though.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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