Thursday 27JAN2011 1310GMT
On Jan 15 and Jan 19 I posted to this blog links to two articles from Bloomberg reporting two regional Fed presidents discussing a potential wind-back of QE2. The statements were, as I noted at the time, innocuous, anodyne … what was most interesting to me was that they had been made at all.
With the release of the FOMC statement yesterday all talk of winding back QE2 has pretty much disappeared.
Now, we all know correlation is not causation (now watch as I disregard this warning …) … but … the dip in the S&P started around the time of these statements. Now that these statements have been shown to be not Fed thinking I am wondering if the way is now clearer for renewed equity market buying … Those controlling the big money flows pay a lot of attention to Fed thoughts and words (and deeds).
1296 & change on the ES was the top … and has been resistance since (during yesterday’s cash hours and in the ‘overnight’. If you want to be short, now is the time (& place) … but I am going to go into the morning session looking for a move up as my bias.
EDIT – 15 minutes after posting I realised I had out the wrong day/date on the title … it is Friday the 28th here in the land of droughts and flooding rains (just after midnight AEDST), but the GMT time is still Thursday the 27th. Anyways, its about 1 hour to go before the NYSE opens!