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tjtakes Trey Jarmond
@The_Real_Fly Tornados in midwest... iceland volcano, stock market futures fucked, RAPTURE (lmao)
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China: HSBC Manufacturing PMI (May): 51.1 vs 51.8http://bit.ly/dwMzKc
Here is how they will operate over the next year. The Federal Reserve will eventually have to take a break from purchasing U.S. Treasuries. The last time the Federal Reserve stopped creating cash reserves the stock market dropped like a rock, that occurred in late April 2010 through late August 2010. This time around, the Federal Reserve will simply let the current QE-2 expire, however, they will hint that are are planning a QE-3 whenever the stock market declines sharply. By doing this they can buy themselves some more time and hopefully see the price of commodities decline over the next year. It is the inflated commodity prices that keep the central bank from inflating the markets further. You see, the more cash reserves that the Federal Reserve creates the higher the prices of oil, gasoline, copper, gold, silver, cotton and almost every other commodity will be. By using rumors of a possible QE-3 throughout the rest of the year they will get the institutional money to buy the markets sporadically. Therefore, if the stock market does pullback or decline it will not crash and burn it will just decline gradually. Basically, they will use the boy that cried wolf theory until it no longer works, then they will actually implement QE-3.
Sometime in 2012 will be when the Federal Reserve will put the pedal to the metal and begin a massive QE-3 program. The central bank has been playing yo-yo with the U.S. Dollar for nearly a decade now. Simply put, the U.S. Dollar is the central bank's instrument of choice for inflating and deflating the markets. When they allow the U.S. Dollar to decline, the stock and commodity markets inflate higher, that is exactly what QE-2 does currently. If the U.S. Dollar Index rallies or trades higher then the major stocks and commodities simply deflate and trade lower. The next couple of years will be a traders market, however, the maestro behind the moves will be the Federal Reserve. Stay tuned and watch for QE-3 in 2012.
Read more: The Next QE-3 Will Be In 2012 - Traddr! http://www.traddr.com/profiles/blog/show?id=1386290%3ABlogPost%3A63960&xgs=1&xg_source=msg_share_post#ixzz1MsFUSNDq
This week is options expiration. All traders must be aware of this factor as it is part of the reason why the markets are trending higher today and most likely will tomorrow as well. Why? Options expiration week is almost always noted by sharp moves in one direction and then the other. The fact that Monday and part of Tuesday saw a solid move lower, generally means that the next few days will be up. In addition, short levels are extremely high in the markets. This means the institutions will most likely push the market in the opposite direction as well, keeping a maximum of the profits on puts sold. Knowing this key can lead to avoiding many of the the pitfalls of options trading.
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The markets are being carried higher today on the back of a surge in commodity prices via a weaker Dollar. The United States Oil Fund LP (NYSE:USO) is trading at $39.36, +0.81 (+2.10%). This is propelling Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) dramatically higher which in turn is carrying the Dow Jones Industrial Average. Earnings from Dell Inc. (NASDAQ:DELL) are also pushing technology shares higher. Nail the exact low on oil like members at InTheMoneyStocks.com. Get all the key swing trades by taking the seven day free trial to the Research Center. Click here.
Key areas to watch in the next few days will be beaten down smaller oil and gas plays. These plays could see significant upside should oil continue to gain for a few days. Solar stocks along with other alternate energy plays may also see some upside on oils advance.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
The dollar also held onto its post FOMC gains against the euro and ended not far from its daily lows against the British pound. As much as we believe that the Federal Reserve’s discussions about an exit strategy changes little in terms of their timing of an exit, from a technical and sentiment perspective, the central bank’s clearly outlined plan has helped the dollar. This means that the dollar’s rally could last but just because that may be the case does not mean that investors will start flocking into the greenback in size.
http://www.fx360.com/commentary/kathy/5467/usd-up-on-fomc-minutes-but-will-the-rally-last.aspx
