Tag Archives: Bond market

FED raise rates

Silver dropped -2,60%, while gold is down -1,01% after the news from Fed Chair Janet Yellen. Oil and Copper is also down today. Janpan`s Nikkei 225 is down -1,65% to 14,224 points. Hang Seng is also down together with the rest of Asia.

Janet Yellen

(Picture: Fed Chair Janet Yellen)

The U.S indices traded down yesterday too and Europe is also in a red territory. Most investors don`t know what to do right now. It seems to be a red opening in the U.S later today. This is all reactions on the FOMC meeting yesterday.

The Fed will probably end its massive bond-buying program this fall and probably start raising interest rates around 6 months later. This comment sent stocks and bonds tumbling. We will see a more aggressive path toward higher interest rates than anticipated she said yesterday.

The Federal Reserve has held the interest rate near zero since late 2008. They have pumped trillions into the markets with its bond purchases. All this because they tried to foster a stronger recovery. Despite the QE program, the growth has been very slow.

The change in its rate hike guidance did not mark a shift in its intentions and they will wait a «considerable time» after shuttering its asset purchase program before pushing borrowing costs higher. «Considerable time» means about 6 months.

But, as Janet Yellen said: «It depends – what the statement is saying is it depends what conditions are like».

Most people don`t know it, but the best period of economic growth in all U.S history was without a central bank. Do U.S really need Federal Reserve? They created the markets crash in 1929, and so far the FED has been a disastrous.

The FED started about 100 years ago, and since then the dollar has lost more than 96% of its value. The size of the U.S national debt is more than 5000 times larger. The Fed`s «debt-based» financial system has trapped the U.S, and are on the verge of the greatest financial crises in history.

Congress could have shut down the FED long time ago. I HATE DEBT!

Reports today:

08:30 AM ET Unemployment Claims
10:00 AM ET Existing Home Sales
10:00 AM ET Philly Fed Manufacturing Index
10:00 AM ET CB Leading Index m/m
04:00 PM ET Bank Stress Test Results

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Filed under Quantitative Easing, Stock market

FOMC Press Conference

Asian stocks fell today as investors are waiting for the Federal Reserve`s policy statement. The FOMC (Federal Open Market Committee) will end a two-day policy meeting today, after data yesterday indicated the U.S home-building industry is stabilizing.

Investors are still very cautious and The Fed will probably water down their forward guidance and keep U.S interest rate low for at least another 18 months. The FOMC will further scale back its bond-buying at the meeting.

They will probably reduce purchases for the third time by $10 billion to a $55 billion monthly rate. Gold had the longest slump since mid December 2013. What is going on with the precious metal? Are the first stage in the gold bull over?

Gold has declined before the meeting and are now trading at $ 1345,10. Nobody knows what Janet Yellen will say today, but it is expected that the gold will bottom out today before the meeting and then go up again.

Traders will probably sell on rumors of Fed tapering and will cover shorts and buy after the announcement. Gold broke out of its first stage, and now have a sharp pullback to previous resistance. Gold is volatile so it is expected.

Now, it will be interesting to follow the bond market. It seems like it is on the way to break out to the upside. If TLT ETF who tracks the value of the 20-year treasury bond breaks out, the rates will drop. So, how will that be if the Fed buy fewer bonds?

Right after the Fed meeting, I will follow the gold price, stock market, bond market and the interest rate. Janet Yellen can move the market, but it depends on what the news is? I look forward to the FOMC meeting today.

Reports today:

02:00 AM ET FOMC Economic Projections
002:00 AM ET FOMC Statement
02:00 AM ET Federal Funds Rate
02:30 AM ET FOMC Press Conference

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Filed under Commodities, Stock market

Terrible week?

Most of the investors do wrong tings with their own portfolio right now. The future is very, very excited and I think we will see one of the biggest moves in a very long time. One of the biggests opportunities in decades.

It`s a lot of noice out there. The market we have today looks like the mid 90`s. That time, we saw a big rally. Bullish markets tend to go much higher then expected, and that can go on in a very long time. Now it is very similar.

In the mid 90`s we saw a rally because the bond market crached, and at the same time we saw a surge in interest rates. Money came from the bond market and got into the stock market. Bond hedge funds plummet.

Bond investors are running like crazy from bond funds now and $123 billion disappeared only in june this year. Today we see the biggest interest rates surge in at least 50 years. The growth is slow like it was in the mid 90`s. GDP was below 1% and China was slowing too. The volatility is very low.

It`s a lot of money on the way into the stock market. But investors will be more selective than never before. Stockpicking is the key. It seems to be very bad for weak stocks. Great stocks will do it much, much better. It will be a huge rally in superior stocks.

Europe`s largest economy, Germany, are growing faster now, and the second biggest economy in Europe, France, albeit marginally for the first time in nineteen months. It seems to be an upswing in the European markets right now.

Today I will look at these news:

S&P/CS composite at 9:00am

CB Consumer Confidence at 10:00am

It is the first day today that Goldman Sachs (GS), Nike (NKE), and Visa (V) are officially part of the Dow 30.

SPX is overbought and I see a rally in MACD. I think it will be a huge drop before february 15 2014. The drop can come earlier, but it depends on different things like Syria, Iran, QE or China to name something. Historically, the volatility is increasing from september to november. The week we are in now has a bad history. This week has been down seventeen times the last twentytwo years. It doesn`t mean it will happen again, but it`s something to keep in mind.

Take a closer look at the chart below. NYMO, or McClellan oscilliator, a measure of overbought/underbought conditions in the markets. It is at it`s highest since july 2011. At that point the market plummet 20%! It doesn`t mean that it will happen again, and I am not trying to make you afraid. It`s just statestics.

NYMO

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Filed under Stock market