Thursday, August 1, 2013

It Just Does Not Add Up

After the Fed meeting yesterday, I was watching the markets closely last night and was left pondering on what to write about. I chose not to bother writing with the upcoming job number on Friday morning and I wanted to see a 24 hour reaction in the marketplace after the Fed chose to do nothing. As I had stated the other night in my last post, if the economy is better, than just go ahead and taper the quantitative easing already! 

So the Fed comes out with no intention or hint of tapering and on top of that they come out more dovish towards the economy and are now worried about DISINFLATION. Of course, one would think the FED statement would weaken the $ but if you watched the price action in the currencies, you could see that a technical buy was due on the charts. Sorry I did not write about this last night but I did want to see how things would play out for a full day of trading.

I have watched and I must tell you my mind has really been working hard over the past 24 hours. Let's take a look at 3 daily charts- Dow Jones, US Dollar and GOLD and then I am going to throw something at you. But first take a look at all 3 charts


First, the GDP number released yesterday was a farce with anemic growth even with the BS revisions. Second, Art Cashin from CNBC said it best- "The Fed Chickened Out". I could not have said it any better, my opinion THEY know we are up SHIT'S CREEK and they have no idea what they are going to do next! Today we got jobless claims at a 5 and a half year low, how reliable is that number? Then we got a HUGE jump in the ISM manufacturing number from 50.4 to 55, one month does not make a trend! So the dollar has rallied, along with the US Stock Markets and GOLD is sitting right above $1300.

Here is my take and I could be completely wrong, but as I said my mind has really been going here!
Stocks are at all time highs and the WORLD is anticipating a solid jobs # based on the past couple of days numbers out of the US. I believe the markets are setting themselves up for a major disappointment and I would not be surprised if we get a much weaker than expected job number early Friday morning. Here is some food for thought, the FED was terribly bearish yesterday, does anyone not think that they do not know how the job number is going to be? Again, I could be wrong, but I have been around long enough to know better. If we do not get a number close to 200,000- watch the dollar come unraveled and GOLD fly!

To Taper or Not To Taper-A Complete JOKE and with STOCKS trading at all time highs currently,
I think we should all expect some great volatility in the coming weeks and months ahead. Things are not as good as what we are being led to believe!

Be Careful tomorrow,
TraderMartin

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