Well , pretty flat day yesterday after a gap lower then we had a POMO day which holded us up. Today we have NO pomo day , the dollar reversed and broke the falling wedge I had and looks like it will begin to move higher.
The markets is STILL in a topping process and NO reason for you to get bullish here. We are extremely overexteneded and more than we were before april flash crash. This is just setting up for a big enormous CRASH and personally I think it will happend maybe start Friday with Q3 GDP numbers - if not we should wait for 3. November the election day, which will be SELL THE NEWS!
Summation index still on SELL signal since 19th october - and VIX are about to breakout above the big huge falling wedge. When that happends WITH volume - thats the first sign that we have a big breakdown comming.
We have NEVER had so many smart moneys shorting the Nasdaq as we have now... nearly a double reading now from what we had before the crash 07-08 everyone remembers about. Do the smart money know something we dont know ????? Why do they short so much as they have never been before last 10 years ?
The dumb moneys are long and still holding long, everyone thinks its safe to step in here and we will go to the moon.
QE2 is Bernanke's quantitative easing (round 2). With freshly printed money, Bernanke is buying treasuries from the banks, which they in turn have been putting the money into supporting the markets. None of this activity makes the problems disappear, therefore there is extreme amount of risk in securities, given the problems that seem to be mulitiplying like rabbits. (just how far does the rabbit hole go?)
Bernanke has been attempting to create inflation, or at least the perception of inflation, among other "tools" to scare people out of the security of normally "safe" investments by giving low returns and little choices for people seeking returns to...er..turn towards. The problem with this is that:
1) Thus far Bernanke has not been able to thwart the deflationary pressures.
2) Unemployment remains high
3) The system is riddled with corruption and fraud.
4) Retail market consists of a high number of soon-to-retire babyboomers, that have been scared out of their witts for their golden year nest eggs, so they will not be returning. Those remaining in the market will continue to pull out.
Of course this has been a transfer of wealth from the already stressed taxpayers to cover-up the insolvency of the banks due to their fraud and many years of siphoing capital in the form of overly-lavish bonus and compensation packages.
QE will not effect nor affect foreclosures.
But people - dont be fooled by the FED... a crash is comming..
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