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Technically Speaking: QE3 | Poster-Boy Update

July 13, 2011 10:20pm ET


QE3 | Poster-Boy Update

Today, rumors of QE3 emerged from the release of the Fed-minutes and stocks took off like rockets. In the process, Gold pushed its way to a fresh new high, while the Dollar gave back most all of its recent gains.

Following the press release, Rick Santelli of CNBC described the Stock Market as a poster-boy benchmark measure of a recovering economy.

We suspect he was inferring that the powers-that-be, namely the Fed and Big Government, will go to whatever extremes necessary (QE-99?) to keep stock prices afloat, much like they have attempted to do with home values -yet another poster-boy property of our esteemed academic leaders.

Long before the headline release crossed the news wires stating that Moodys was threatening to downgrade US credit rating, the exuberance surrounding the prospects of QE3 had already begun to wane. After being up over 160-points by 11:00 am, the Dow gave back nearly 120 of those points to close up just 45-points on the day.

As a result of Moodys announcement, after hours futures moved down sharply suggesting that selling pressure will be bearing down upon equities at the open on Thursday.

If they weren't' such a bunch of academic-political blockheads buried deeply in intractable states of collective denial, we'd feel their pain. That they have manic and non-cooperative poster-boys on their hands should give them pause to re-think their cause, but we seriously doubt they will.

S&P500

From our short-term trade setup posted last Friday (and shared on Wednesday), we have highlighted 20-points of downside captured upon tagging the 1315 target.

Over the short-term, it would not surprise us in the least if Thursday's selling pressure morphs into another Friday/Monday rally. Whatever our poster-boy delivers, look for a potential turn-pivot on Monday July 18.


Technically Speaking Video

 

I trust and hope that you have extracted something of actionable value from this edition of Technically Speaking.

Until next time,

Trade Better/Invest Smarter

 


Elliott Wave Technology's Near Term Outlook is for those who demand masterfully consistent and objective technical analysis that visually lays out actionable ideas from which to engage the broad markets over the short and near term. The publication is delivered to institutional and private clients each Monday, Wednesday, and Friday evening.

The Near Term Outlook covers 7 essential broad markets.

US DOLLAR | DOW JONES INDUSTRIALS | S&P-500
NASDAQ-100 | GOLD | CRUDE OIL | BONDS

 

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