QE3 and More Operation Twist

September 13th, 2012
in Gary's blogging, syndication

FOMC Market Commentary For 09-13-2012?

See 13 September 2012 FOMC Meeting Statement: HELLO QE3!!!!!

Fifteen minutes before the Fed meeting some of the markets started to fall and was very noticeable It would be a disgrace if someone had advance notice to the Fed minutes? They didn't drop very far and somewhat recovered and I am thinking it was the HFT algo computers that created this anomaly.

Markets soared higher at the announcement. The DOW climbed 21 points, the SP500 climbed 6 points and the $RUT went up 4 points. Shortly after the markets fell back to their highs of the day.

Follow up:

The immediate investor reaction was a positive one for the markets in general. Within 15 minutes of the announcement they continue to melt up recovering all of the initial run-up plus more. The initial green volume was low to moderate and began falling off as investors got used to the contagious euphoria.

The US dollar did crash as expected, however it recovered quickly and is trading nearly at the exact place BEFORE the FOMC announcement.

By 1 pm there was upward pressure to melt further up but I want to wait out this day and see if a real trend up is going to occur.

At this point the algo computers are melting the averages higher and we will have to wait to see the final outcome.

@dailyfx:

FED TO BUY $40B MBS MONTHLY, CONTINUE 'OPERATION TWIST'. EXTENDS ZERO RATE POLICY INTO 2015.

FOMC WILL ADD TO PURCHASES IF LABOR MARKET DOESN'T IMPROVE. TO KEEP POLICY STIMULATIVE FOR 'CONSIDERABLE TIME'.

$USDOLLAR taking it on the chin in a major way, down sharply on the $40B a month MBS purchase decision.

Twist + new MBS purchases. Roughly in line w expectations RT @DailyFXTeam: FED STIMULUS TO INCREASE LONGER-TERM HOLDINGS BY $85B PER MONTH

@zerohedge:

Fed Folds: Will Do Open-Ended MBS Buying, Extends Operation Twist

Bernanke has acquiesced - and all is well in the world:

  • *FED TO KEEP POLICY STIMULATIVE FOR `CONSIDERABLE TIME'

  • *FED WILL ADD TO PURCHASES IF LABOR MARKET DOESN'T IMPROVE

  • *FED DOES NOT SAY WHEN MBS PURCHASE PROGRAM TO END

  • *FED TO BUY $40B MBS MONTHLY, CONTINUE `OPERATION TWIST'

  • *FED TO BUY MBS, EXTENDS ZERO-RATE POLICY INTO 2015

 

The DOW at 1 pm is at 13428 up 94.62 or 0.71%.

The 500 is at 1448 up 12 or 0.84%.

The $RUT is at 851.94 up 7.03 or 0.83%.

SPY is at 145.63 up 1.21 or 0.84%.

The trend is up and the current bias is up.

 

WTI oil is at 97.15 trading between 96.52 and 98.60 and the bias is negative.

Brent crude is at 116.44 trading between 115.40 and 117.48 and the bias is neutral.

Gold is at 1748.99, trading between 1754.39 and 1727.44 with a neutral bias.

Dr. Copper is at 3.70 up from 3.69 earlier.

The US dollar rose from 79.72 earlier to 79.91, then crashed to 79.52, recovered and is currently trading at 79.86.

 

** RRR = Risk Reward Ratio

To contact me with suggestions or deserved praise:

gary@econintersect.com

Written by Gary

 









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