Last short buy on the ES June 09 contracts this a.m.@ 795. Scaled entries put my average in at 775. Retrace before a nice leg up should get us under 7000 on the dow and under 740 on the S&P. Who is willing to hold into these gains over the weekend? Thats the plan, G/L to us all. Here is a VERY scary scenario because of yesterdays actions by Obama.
The McClellan Oscillator rose to 328.21 Wednesday, an extreme overbought reading. In fact, most of the time we get readings above 300, we see 10 percent or more declines start within a few days, and last several trading sessions.
The FOMC, Federal Reserve Open Market Committee, announced it is going to add well over another $1.0 trillion of cash to the economy, through purchases of securities in the market. We have been saying for about a year now, that the Fed will have to buy the long end of the Treasury Security market to keep long-term interest rates low to help the housing market. This is how they can hyperinflate the economy, while keeping interest rates artificially low. Well that is in fact one of the steps the Fed announced today it will conduct (you can bet it has been doing this for quite a while). This is a highly unusual step, but we knew they would eventually have to take (admit to) it.
We've been saying for months now that before all is said and done, the Fed and Treasury will inject over $10 trillion in this faltering economy, and isn't it a crime that none of it is going to the American Household. You get to keep your debt, your unemployment, and your crappy credit score (did you know it gets worse without you doing anything, simply by the credit card companies lowering your credit limit down to the amount you owe?). What the Central Planners do give you is a higher tax bill and higher inflation. This policy failure will cause the coming cataclysmic wave (C ) down later in 2009 and 2010.
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