Thursday, September 15, 2011

LET THE LIQUIDITY FLOW SAYETH THE FED

WHEN HE COMES OUT FROM UNDER HIS ROCK, PAY ATTENTION
We should have known something was up when Timothy Geithner was making the rounds doing interviews and proclaiming that there would never be another capitalistic banking failure ever (another Lehman event).  At that moment we should have simply went triple long everything as this was the signal that QE III was underway.  Read the following Bloomy article regarding Fed coordination with everyone to save....well everyone.

Call me a little gun shy as I didn't plow everything into longs.  Unfortunately, we all should have seen the signals as big money was buying transports and they were up over 10% in two days....it's such a hard thing to keep a secret.

UP, UP, AND AWAY FOR A WEEK OR TWO
Here is the current view of what I think could happen.  First here is a chart of $SPX where it is really a nice chart.  I think 1230 could be upper resistance, especially since the 50 day SMA is right there.  That might take us a day or a week to get there, but if you really think about it, a week is about how much time we'll need to find out that Greece has spent through its latest allowance and is in need of another infusion of cash!  This is a great pre-boost before the Sept 21st Fed meeting.  This would normally be when I suggest that the Fed is going to move forward with a full court press of official QE III, but today's inflation numbers might make them pause and do a double secret QE III.



The way things have gone lately make me suggest also that a push through 1230 would mean that 1260 could be the next level of resistance.

Let's also not forget our old buddy GLD.  As much as I hate it, the chart says this thing is going to track back to the area I've mentioned before at 162.50.  Gold needs a good riot or two in Europe to resume it's parabolic ascent.



I'll post a bit more later this evening.  Lots of going on.  Don't be confused by my sudden bullishness, we all know that the ECB and FED coordination means nothing, we are just pretending it matters and we are going to let the bots take our stocks higher.

GOATMUG


Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.blogspot.com/