Ka-pow! "The FOMC continues to anticipate that economic conditions--including low rates of resource utilization, subdued inflation trends, and stable inflation expectations--are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
Bam! "...the Federal Reserve will at some point need to begin to tighten monetary conditions to prevent the development of inflationary pressures. Notwithstanding the substantial increase in the size of its balance sheet associated with its purchases of Treasury and agency securities, we are confident that we have the tools we need to firm the stance of monetary policy at the appropriate time."
And so -- no surprise -- blue-chip stocks (SPY) and Treasury long-term bonds (TLT) are barely moving from where they began the day a half hour earlier. SPY opened at the middle of yesterday's range and then creeped up half a percent. When the Bernanke testimony was released, the price creeped back down, giving an open to now range of a mere 0.2%. TLT opened the day at the top of yesterday's range, barely budging to the downside, and post-testimony, barely budged to upside a while longer, before rising past the top of the range. Bond traders clearly focused on the Ka-pow! rather than the Bam! The dollar declined in value against the euro and the yen but stayed within yesterday's range (EUR/USD, USD/JPY). Not so exciting after all. Which is probably why no one is marketing a Ben Bernanke action figure. Aside from the indicators, I'm also keeping my eye on POT this morning. The stock showed a nice price decline yesterday on a move into overbought territory on the money flow index. I am hoping for an upward retracement to provide a more profitable (potentially) entry point. So far, POT is trading below yesterday's range, so no joy. | I'm deep into Freefall, and am fascinated by this leading economist's analysis of the collapse of capitalist finance and the struggles of the Federal Reserve and Treasury to prop up the wounded system. |
Let's run the numbers:
Indicators, at about 10:20 a.m. Eastern:
- Blue chip stocks etf (SPY) is trading at $109.87, entered macd bull mode at close on Feb. 15 (at $109.74)
- Fear index or volatility (VIX) 21.53, bear (bullish for stocks), Feb. 12 (22.73)
- Treasury long bonds (TLT) $90.87, bear, Feb. 9 ($91.18)
- Corporate junk bonds (JNK) $38.52, bull, Feb. 18 ($38.40)
- Emerging markets (EEM) $38.57, bull, Feb. 16 ($39.43)
- Gold (GLD) $107.69, bull, Feb. 12 ($107.04)
- Oil (USO) $38.36, bull, Feb. 10, ($36.51)
Forex currency pairs:
- Dollars per euro (EUR/USD) $1.3558, bull, Feb. 19 ($1.3611)
- Yen per dollar (USD/JPY) ¥90.43, bull, Feb. 16 (89.81)
- AKS, iron condor (p19/-p20/-c25/c26), $21.46, bull, Feb. 12 ($21.68)
- CAL, covered call (-c19), $19.84, bull, Feb. 16 ($19.88)
- CSCO, iron condor (p22/-p23/-c25/c26), $24.17, bull, Feb. 8 (23.50)
- GCI, covered call (-c15), $14.83, bull, Feb. 18 ($15.27)
- WFC, iron condor (p26/-p27/-c29/c30), $27.26, bull, Feb. 22 ($28.01)
Zombie shares:
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Topics: S&P 500, SPDR, Spiders, Treasury bonds, high-yield corporate junk bonds, emerging markets, gold, precious metals, oil, petroleum, AK Steel Holding, Alpine Total Dynamic Dividend fund, Continental Airlines aviation, Cisco Systems networking, CVS, pharmacies, drugs, Gannett newspapers media , Moodys bond rating, Annaly Capital Management real estate REIT mortgage-backed securities, Palm smartphone Pixi Pri, Potash Corp. Saskatchewan, Wells Fargo banking financial.
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