An end result of the Federal Reserve's quantitative easing programs, including operation twist, is the Fed's balance sheet has swelled with the growth in U.S. treasury holdings. In 2011, the Fed purchased over 60% of all the treasuries issued by the government. A recent Bloomberg comment notes the Fed now owns over 37% of all treasuries with maturities greater than 5-years....
A six-week string of gains in the S&P 500 (^GSPC) ended on Friday amid shifting expectations for central bank stimulus. This week could bring clarity on that issue, and that could determine whether the recent rally that took the index to four-year highs will persist.
Global markets rallied today on news that ECB President Mario Draghi stated that the ECB will do everything it can to bolster periphery credit markets. The street took the statement with a fair amount of skepticism but I didn't. Draghi is no EU bureaucrat from Brussels. He's a man of character who means what he says and he won't be bullied; especially by the Germans. The two LTRO's (Long Term Refinancing Operations) he implemented as ECB President prove my thesis. The Germans were not pleased with these operations yet he moved forward with them nonetheless.
In the not so distant past arguing that precious metals prices were setup to fall generally elicited a response which was not real pleasant. In fact, during gold’s infamous bull market rally on several occasions I called for pullbacks which regardless of the accuracy of my call generated hate mail that seemingly never ended......
I have scanned through my list of indicators which discuss sentiment based on momentum, put/call ratio, the advance/decline line, Bullish Percent Indicators, and several ratio based indicators and they are all SCREAMING that a top is near.
The Federal Reserve is holding a two-day meeting Tuesday and Wednesday of this week. Market participants are expecting the Federal Reserve to prop up financial markets yet again with some grand new plan. The fact is the Federal Reserve is running out of bullets.
ECB (European Central Bank) announced this morning that it had coordinated with the Federal Reserve, Bank of England, Bank of Japan, and the Swiss National Bank that it provide three U.S dollar liquidity operations. The news caused a sell-off and a downside spike for the U.S dollar. The EUR/USD jumped to the 1.3934 high which bring a sight of relief for the Euro bulls.
