What Happens When There Is No QE3

Closing Market Commentary For 08-17-2012

At the opening this morning the averages made an unsuccessful run for the gold ring but were rebuffed by the bears. All session long today we have seen baby movements that were less than 2 points on the SP500 and the volume, what there is, remain low and anemic. Definitely not a solid bullish sign see markets try and fail to move into new high ground territory.

At the close, a whimper, the sun set again on a dismal market high on ‘hopium’ and other unrealistic expectations. The market didn’t even give us the civility of some volatility to show it was still alive, it just ended. This market is a sorry state of affairs as it hopes to see QE3 sometime in the near future. If that doesn’t show you how weak it really is nothing else will.

The RRR** at the close remained narrow and not conducive for profitable trading. Swing trading today was also in doubt as we are near market tops and need to wait out the possibility of markets swinging either way. Today is another ‘sit on your hands’ day. For an up to the minute prognosis join our elite investor group and become a premium subscriber. What we had to say to them would surprise you and place the profit side in your favor.

The DOW at 4:00 is at 13275 up 25 or 0.09%.

The 500 is at 1418 up 2.65 or 0.19%.

The $RUT is at 819.82 up 6.74 or 0.83%.

SPY is at 142.23 up 0.22 or 0.15%.

The trend is up and the current bias is neutral with a bearish slant.

WTI oil is at 96.21 trading between 94.95 and 96.30 and the bias is positive.

Gold is up today at 1616.12 trading between 1612.14 and 1620.08 with a neutral bias.

Dr. Copper is at 3.42 up from 3.38 earlier.

Earlier the USD tumbled from 82.55 to 82.37 then skyrocketed up to 82.82 and is currently down at 82.61.

The 500 at the close.

The DOW at the close.

@SA

U.S. dependence on mid-east oil rises.

After a period of cutting dependence on foreign oil, particularly from the Persian Gulf, sales to the U.S. from Saudi Arabia have picked up, growing 26% on year to 1.45M bpd in the first five months of 2012. The rise is partly driven by the sanctions on Iran, but again leaves the U.S. increasingly exposed to the instability in the region.

@forexcrunch:________

Inflating Away Debt – Future of Monetary Policy?

As mentioned beforehand, the Federal Reserve doesn’t have many tools to move the economy. Also most other central banks have already tried various conventional and unconventional tools to get out of the crisis. So did governments.

Nearly 4 years after Lehman Brothers collapsed, recovery is slow or nonexistent. The world is still deleveraging from the various bubbles and fighting the Debt Mountains is a Sisyphean task. Perhaps it’s time for a different approach?

Read the rest of the article Inflating Away Debt – Future of Monetary Policy?

Have a safe weekend, see you Monday.

** RRR = Risk Reward Ratio

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Written by Gary