Euphoria Continues, But Watch For Reductions In Leverage
Hi, I had a few minutes this morning to throw together some charts and make a few comments on what was a momentous week in global financial markets.
This will be extremely abbreviated but I thought it important to give my readers a perspective on these developments because I believe they set in motion a course of events that will lead this market higher into the election.
The next couple of days in the stock market could be on the quiet side. You see, the Federal Reserve is holding a two day FOMC meeting on Tuesday, and Wednesday. Many institutional traders are going to be on hold until they hear what the Federal Reserve Chairman Ben Bernanke says. As you know, most institutional traders and investors are just dying to hear the words quantitative easing three (QE-3). The likelihood of this happening this time around is very slim.
Trade Lesson: How To Locate And Trade An Extended Move
This morning, the 10 and 30 year U.S. Treasuries are declining lower. The fall in the bond market comes as stocks soar higher and fear in the marketplace fades. Traders can easily watch a chart of the iShares Barclays 20+ Yr Treasury Bond (ETF) (NYSEARCA:TLT), and the iShares Barclays 7-10 Year Treasury Bond Fund (NYSEARCA:IEF) and see that both equities are coming under selling pressure.
Nearly every trading day the U.S. Dollar Index futures (DX-M2) will pullback or decline when the index trades higher before the opening bell. As you may know, when the U.S. Dollar Index declines the major stock indexes will usually rally and trade higher. The opposite is true when the dollar rallies as the major stock will usually decline and trade lower. This afternoon, the U.S.