FOMC Wrap-UpBrian Kahn - Thursday, September 13th, 2012
Did anyone see weekly claims today? I knew it! Well, actually, good for you because they don't matter. Actually they do matter. The worse they get the better the equity markets get. Today's claims came in above expectations - a whopping 382k. This is bad, bad, bad. If this keeps up, I am expecting a negative monthly jobs number in the near future.
So the big news, the Fed said rates would be low through 2050, I mean 2015. This is not good for people who are living off of bond interest because they are "older" and that is where the primary allocation should be given their age and risk tolerance. I do feel bad if people who need there allocation to provide income and it doesn't give it to them, so they get "forced" into the equity market. Then, just by chance the markets have a hiccup and drop. That is not a good situation for the people that needed the money to be liquid and "safe" but now see much lower levels of assets in their portfolios. I am just saying that could play out.
But on the flipside, for now, why be anywhere but equities. They sure are the place to be!
So now we have equities roaring towards the 1487-1500 congestion area. Can anything stop them prior to that level? I am not standing in the way with any sizeable position as I want to see sellers come back in first. Sellers? Sellers? Kind of like: Bueller? Bueller?
Oil, you know I am keeping an eye on that. It has been a good run. $100.00 seems likely. That may be a fun place to play a "psychological" level. In the meantime, have fun filling up your gas tank. Oh yeah, that leads me to another fundamental - PPI. It only came in at 1.7% - waaaaay above expectations. But the Fed said there isn't any inflation because we strip out the food and gas. For food inflation, go buy some chicken wings or some peanut butter. I like to see the percentages that prices go up in short periods and laugh at the Fed statement at the same time.
Back to oil. That is my lead in to forex prices. It took a while as it always does after a Fed statement. But once equities started trending higher, the USD started trending lower. Who would have thought that the EUR would be at 1.3000 to the USD. Overbought anyone? And oh yeah, I was talking about oil. The USD/CAD - heading towards .9650 today. Remember, I said I am not touching any bids in the USD/CAD until oil prices get towards 100.00. That could be a fun inter-market relationship.
Retail sales tomorrow - let's hope that the US consumer didn't spend anything and that may get us to 1500 in the SPX!
Thanks to all who listened in on last night's webinar - great participation!
Happy Trading and Be Environmentally Cool
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
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