Wednesday, July 13, 2011
QE3 Reflexive Buying
Anytime QE3 is mentioned the market rips higher. It is a shot of adrenaline for this market but like yesterday, the rally eventually faded. As I am writing we are fading already and we're less than 1% higher on the day. Like yesterday, traders are using the strength to lighten their load. Like those quick rallies that died in the afternoon in June, this looks like another one of those. Usually we had a lot of selling the next day.
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3 comments:
Looking at where QE1 and QE2 have brought the market , why do you think we can't shoot up with QE3 ?
Because when QE1 and QE2 were announced, we were at deep oversold levels. We're not there yet. And the market knows there will no QE3 until the stock market has a deep selloff and Bernanke panic stimulates.
I believe a continuing lack of job creation will be enough reason for QE3. There will be Qe3, QE4, QE5 and so on for decade.
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