wednesday brainstorming

1. Obviously the big event today or for weeks even is the FED decision today. My assumption is that despite their claims they can do plenty almost nothing left to do. So called twist expansion of duration ( maturity of bonds) will do more harm than good as the curve getting flatter is rather harmful for banks – but more important all this bullshit has been done 20 years ago by Japan and results are not good at all for markets and consumers. Twist is anyway already priced in and for QE3 which will not be productive either Bernanke might want to wait still it could at least stop a dropping market in the future ( almost a sure probability) – for now it would be a waste and the end of the FED midterm as they will prove that they are perfectly useless.

The markets sentiment is very bearish still as Put activity is very high – very much so for financials who keep being weak but that limits any sell off for the time being. Last time we had a similar situation was in March 2008 which was followed by a 10% rise over 4-6 weeks before the real crash started. Within a few days we have 2 events an unpleasant New Moon in a T-square and a heliocentric T-square of Mars Pluto and Uranus against the famous quarterly window dressing end of Sep. The astro patterns are rather a harbinger of trouble for markets and a downswing of some magnitude is due. The window dressing will be rather an upside event and the timing is very much overlapping. Price patterns suggest as we are counting day 6 today that within the next 2-3 days the current upmove will rather be turned back into a retreat of market prices as well.

Apple seems to have set 4th Oct as the D-day for the big hype announcement for the IPONE 5 and 4s which will create a rising apple price short term as we are in a week 11 count leaving 2 weeks to go – which should be enough to reach 440-50 target.

A little disappointment today as no QE should be announced might trigger a brief downswing but Twist has to be delivered since that is mandatory by the market and could cause a steep sell off if not delivered. With twist I expect sideways for another 1-2 days before a downswing with the New Moon should start.

excerpt

On Eve Of Critical FOMC Decision, Republicans (Re)Send Letter To Bernanke Demanding No More QE

Submitted by Tyler Durden on 09/20/2011 – 18:49Ben Bernanke Central Banks Federal Reserve Global Economy Jon Kyl Monetary Policy Quantitative Easing recoveryTrade Wars Unemployment

Nine months after the very same quartet of republicans, headed by John Boehner, sent a letter to Bernanke protesting the launch of QE2, this time the GOP has waited until a mere 24 hours before the actual announcement with an identical, if preemptive, message, namely: don’t print, or stated differently, “we submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people.” And while the political undertone of the letter is all too obvious: i.e. prevent any additional Obama-benefiting stimulus in the economy through the only conduit Obama has left, courtesy of Fiscal stimulus being snarled for good due to the republican majority in the House, Boehner et al bring up a valid point, which is that the Fed policy now accentuates market uncertainty and promotes trade wars: precisely the topics discussed in an earlier article today. As stated by Boehner: “Our long-term growth depends on restoring confidence and certainty in our fiscal, regulatory, and trade policies — and not on government’s willingness to engage in additional stimulative measures. When asset prices increase due to anticipated Federal Reserve policy rather than economic fundamentals, it increases the potential for speculative action and erodes confidence in the economic outlook, making it more difficult to generate sustainable growth.” Regardless of its actual merit, one thing is without doubt: QE3, and the Fed, just become once again critically politicized, and as such, even more market uncertainty is imminent. All that said, the theatrical optics of this action are quite glaring.

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~ by behindthematrix on September 21, 2011.

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