Just look at the losses in some stocks today like ULTA, down 20%. All you see is red yet indexes are barely down. If stocks had the same move going up as they are having going down, the indexes would be up 2% a day. One by one stocks get slaughtered yet by some miracle the indexes aren't even down 2% from all time highs. Nothing seems to matter unless it makes indexes go up. I assure you of one thing, when QE ends this market will retrace back to 2010 levels.
How come we never had "glitches" until after March of 2009? Ever since the Fed started manipulating the markets with their QE's and day to day tinkering, we have one glitch after another. Obviously they couldn't auction the bills because the Fed was having problems. Maybe they were busy combating the problems in the stock market today? They have their fingers in everything, today the Fed had to pump liquidity in to the markets again to prevent an all out slide.
If the Fed were not in the markets we would have true price discovery and I assure you the indexes wouldn't be at these levels. Shorting is all but banned but now that everyone is long, just pure selling will have a devastating effect on the markets.
Do you really think central banks have a clue as to what banks and insurers are up to? if that were the case we wouldn't have melted down in 2008. Just look at these markets, do central banks have the money to cash everyone out now?
With $85 billion a month just from the Fed how can it? Care to guess how much the ECB and BOJ are dumping in to the system? It seems like a huge black hole that can never be filled. money printing to infinity to bail who and what out?
Forcing banks to move the money in to lending which is what the whole idea of QE was sold to the public as which never happened. I think the Fed should charge the banks on their reserves!
In 2007 I bought AAPL for $121 with margin, 6000 shares.I got scared and sold at $155. I never bought back again, had I just held those shares I would have 4x+ my money today.
When they decide they are done with the stock and bond markets they will turn to real estate. The last asset class to be lifted to new all time highs. Everything I bought in 2009/10 is already much higher but I'm waiting for prices to go much higher. There is lots of money sloshing around and if you compare rental incomes to CD's or short term bonds, real estate has a ways to go. What good is cash at .10% in the bank when you can get 8%+ in real estate rentals and take depreciation? The Fed still needs to repair the mortgage markets and that can only happen through higher real estate prices. As with anything, make sure you cash out when everyone is buying at the top. I suggest you think about this with stocks and bonds as well long before the new year when Bernanke leaves.
All I see is one miss after another on lowered expectations and stocks getting hit 10% at a clip yet they insist earnings are good. Mind you corporations are buying back stock so earnings per share are distorted due to fewer shares outstanding.
The sky is the limit. how can stocks possibly go down when the Fed is pumping $85 billion a month in to the markets? They are financing the entire US deficit, that money is pouring in to stocks which can be elevated to any value since they are not like bonds. The potential is infinite whereas bonds can only go so high unless yields are to be negative. All this cash sloshing around in the hands of a few large banks who now control 70% of all assets in the US.
The stock market will not go down until they are forced to sell stocks by the Fed to push the money in to the economy again in the form of lending to consumers and small businesses, not just big corporations and government. To date corporations are only borrowing to buy back stock, creating debt to buy their own equity. None of this money is getting in to the hands of those who would buy the goods and services from these companies.
My guess is we won't see a change until Bernanke is gone. The fact remains that the economy is weak because QE did not serve Main Street, only the banks and those who are investors in assets that are beneficiaries of QE money.
We are always up on Fridays, anyone dumb enough to hold puts gets wiped out every Friday. Short trades are good for 24 hours tops before the Fed steps in to wipe you out. They make sure to inflict pain on anyone who dares to bet against them.
R2K already did, TZA getting destroyed. QQQ up over 1% and SPY up nearly 1%. the fed steps in once again to fix everything. Yesterday is completely erased, never mind momo stocks like TSLA getting slaughtered. Does anyone even know what is in QQQ on any given day? Markets are within .5% of all time highs yet the stocks in these so called ETF's and indexes are not. Once again all the talk on CNBC is about the Fed, no one even cares about earnings.
No more currency games in the big three. There is no other currency on the planet deep enough to support a huge carry trade. This may very well be why we have seen oil drop, they knew this was coming. The reaction is simple, sell everything.
It is a race to the bottom. Eventually reality will trump this nonsense in the markets. The more they print the more worthless money becomes but the more precious tangibles become. Might I suggest food, gold and ammo?
It is real and the Fed can't print it even though Wall Street prints paper gold. Let's see where your paper gold gets you when currencies collapse! Buy physical gold and silver people!
There will be a bounce but from here in you short every bounce. The ECB news means game over, proof that things are far worse than we have been lead to believe.