Home > Boards > Free Zone > User's Groups > Simple's Green Room

The Fed's Magic Act

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
pennies2007 Member Profile
 
Followed By 185
Posts 41,631
Boards Moderated 1
Alias Born 10/29/07
160x600 placeholder
Top Company News of the Day
The FDA's authorization expands the drug's use to fight Covid-19 to people under the age of 12.
Soybeans Futures Higher on Export Hopes - Daily Grain Highlights
FDA Expands Emergency Use for Lilly Antibody Combination for Covid-19 to Include Infants
Front Month Nymex Natural Gas Fell 24.56% This Week to Settle at $4.1320 -- Data Talk
Front Month Nymex RBOB Gasoline Fell 1.42% This Week to Settle at $1.9529 -- Data Talk
Merck in Supply Agreement With Canada for Antiviral Medicine for Covid-19
Trade Deficit, Consumer Prices on Deck -- Data Week Ahead
Sportsman's Warehouse Shares Fall 19% After Takeover Deal Terminated
EURO STOXX 50 Index Ends the Week 0.23% Lower at 4080.15 -- Data Talk
FTSE 100 Index Ends the Week 1.11% Higher at 7122.32 -- Data Talk
DAX Ends the Week 0.57% Lower at 15169.98 -- Data Talk
CAC 40 Index Ends the Week 0.38% Higher at 6765.52 -- Data Talk
STOXX Europe 50 Index Ends the Week 0.20% Higher at 3613.81 -- Data Talk
STOXX Europe 600 Index Ends the Week 0.28% Lower at 462.77 -- Data Talk
FTSE Closes Down Amid Persistent Growth Fears
Roche to Name New Member to Board of Directors, Re-Elect Chairman
Adobe Down Over 6%, On Pace for Largest Percent Decrease Since March 2020 -- Data Talk
U.S. Services Sector Growth Accelerated to New Record-High in November -- ISM
U.S. Services Sector Growth Cooled Slightly in November -- IHS Markit
FTSE Edges Higher, Wickes's Margin Outperformance Leads to Further Upgrades
U.S. Nonfarm Payrolls Up 210K in November, Unemployment Rate 4.2% -- Update
Johnson & Johnson's Janssen Says Psoriatic Arthritis Trial Meets Objective
Bostic Wants to Speed Up Fed's Asset Buying Taper; Quarles Says Fed Will Need to Raise Rates
U.S. Nonfarm Payrolls Up 210K in November, Unemployment Rate 4.2%
Bristol Myers Squibb Gets FDA Acceptance of sBLA for Reblozyl
FTSE Edges Higher, Service Sector Kept Growth Momentum in November
pennies2007   Wednesday, 12/14/16 12:41:28 AM
Re: None
Post # of 140143 
The Fed's Magic Act

And so we come to it tomorrow...the big day the market has been waiting on for the year-end Fed announcement.

The entire market has priced in a 100% chance of a 25 basis point hike...literally. That's all the analysts talk about. They also say it'll be a ho-hum moment and that all they're really gonna look at is the statement after the announcement when she speaks at the press conference.

But the EU and UJ charts tell us something different. Those 2 charts are telling us that we're due for some kind of shock reversal on both pairs.

So the question is...what could cause such a shock? It certainly isn't the 25 basis point increase everyone expects, although the "buy the rumor, sell the news" story could kick into play. But that really wouldn't be that volatile.

You see, Yellen's back is really against the wall here. Every country out there is doing nothing but cuts...watering down their currency by cutting rates. Yellen really doesn't want to be the only kid on the block raising rates and risking the US dollar going even higher because she knows that's counter productive. But, she doesn't want to stop the stock market rally either.

Currently, the US dollar and the stock market have gone up together, which is unnatural. They should have an inverse relationship...market up, dollar down and vice versa.

So how does she pull a rabbit out of the hat and keep the market up and tank the dollar? What if...just what if...she pulls a shocker and only raises rates by 1/8 of a percent...only 12.5 basis points instead of 25. Or, better yet, what if she really throws em a curve ball and holds steady with NO RATE INCREASE. Now that one would severely tank the dollar and the market would love the idea of a further free ride...thus effectively killing 2 birds with one stone.

Of course, it doesn't have to be Yellen...the shock could come from another source. But I'm really wondering at this point if things won't go very differently tomorrow than what literally 100% of the analysts are all saying.

Time will tell...just putting in my humble opinion as always. smile

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
X
Current Price
Change
Volume
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist
Consent Preferences