according to Morgan Stanley, the Fed will make sure that over the next three weeks hedge fund LPs are happy, that redemption requests are sparse, and that September will be an up month for all those levered to the hilt and chasing beta: for September/October the Fed is now expected to monetize double the amount of bonds in Aug/Sept. In other words, the Primary Dealers, aka Fed Lites, will be using tens of billions of brand new Fed printed money to chase the highest beta stocks they can find.Full article can be found here http://www.zerohedge.com/article/fed-ramp-stocks-september-thanks-front-loaded-pomo-schedule.
Two or three posts down, I provided commentary on the Fed's POMO activities, and things like shown above are why I say that this is a rigged market and very difficult to trade on technical signals. So bottom line, though the technicals are saying loud and clear that we should be moving lower, there's a very good chance that this extra liquidity injection will ramp us higher - just like we saw last year. If you're swinging positions, keep them small, stay nimble and maintain discipline on your stops. Things could really go either way right now.
Good luck trading.
Hello SingleMalt, it is TJ again. Totally agree that the technicals are not proving to be very usefull these days. Last time I made a comment I had mentioned SOXL and did very well. It now is time to get out due to the revised computer sales numbers. TNA is an even better bet now than it was last time I was on the blog. You are very good with the technicals and maybe you can tell me if going into TEN. It is a favorite of mine and I believe it is on its way to $30 over the next month. Best of luck!!!!!
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