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  • superbmindset superbmindset Nov 9, 2011 5:14 PM Flag

    Positive Behavioral Catalyst: OT

    So are we watching what Europe is doing and react to the news?  Or is Europe and the rest of the world watching us, and more specifically the Fed?

    Well the news out of Europe from Tuesday till Wednesday were unchanged.  The market rallied on Tuesday and plummeted on Wednesday, so what caused this change?  

    Surely, gold, oil and other markets should have reacted to the same news but they didn't.

    So why are equities' price action different?

    The Fed has the option of more stimulus through QE or OT, which would help the equity markets, but it also can use another tool, that could potentially hurt equities...

    In my opinion, the Fed's move today spooked the equity markets as they are now fearing it's next move.  

    If you watch the Fed and know where the Fed Chairman spoke this morning before the opening bell, you would know what I am referring to...

    I am personally watching the Fed to gauge the next directional move of the stock market..

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      • 1 Reply to baumanncynde
      • I will let you know…

        Here is the story:

        One day in early November the chief of a Native American tribe was asked by his tribal elders if the winter of 2011/12 was going to be cold or mild. The chief asked his medicine man, but he too had lost touch with the reading signs from the natural world around the Great Lakes.

        The chief decided to take a modern approach, and the chief rang the National Weather Service in Michigan.

        'Yes, it is going to be a cold winter,' the meteorological officer told the chief.

        Consequently, he went back to his tribe and told the men to collect plenty of firewood.

        A fortnight later the chief called the Weather Service and asked for an update. 'Are you still forecasting a cold winter?' he asked.

        'Yes, very cold', the weather officer told him.

        As a result of this brief conversation the chief went back to the tribe and told his people to collect every bit of wood they could find.

        A month later the chief called the National Weather Service once more and asked about the coming winter. 'Yes,' he was told, 'it is going to be one of the coldest winters ever.'

        'How can you be so sure?' the chief asked.

        The weatherman replied: 'Because the Native Americans of the Great Lakes are collecting wood like crazy.'

        My point here is: the Fed using modern approaches has concluded that economic growth is frustratingly slow. They should thus make a decision now and stop relying on whether Americans are “collecting wood” or not….

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