Off your game?
Read our free, updated as of Mar 3, 2022, Dr K report on how to optimize your mind and body so you can boost your focus when trading the markets.
Meet Dr K !
Chris Kacher
  • Nuclear physicist
  • Stock & crypto market wizard
  • Blockchain builder
  • Bestselling author
  • Top 40 charted musician
  • Biohacker
  • Former computer hacker
Your email will always remain private.

MLR - PMP 10/20/14

Major averages gapped up Friday at the open on strong earnings reports, sending a number of stocks higher. Volume was lower on the day but above average. The NASDAQ Composite backed off after hitting its 200dma. MDM favorably switched signals but could switch again as volatility remains elevated. Futures are currently roughly flat to down this morning and have been quite volatile over the past 15 hours. Meanwhile the vast number of leading stocks, including broken-down former leaders, remain in broken patterns with little to nothing in the way of possible buy points in stocks developing currently.

The market is hoping the Fed will extend QE3 when they meet Oct 28-29. So we have had a technical bounce closing in on 200dma resistance. Even if QE3 is extended, QE1, 2, and 3 have not healed the economy. So while pushing money into the market will prop it higher, there is increasing concern that QE is not working, so we may eventually reach a point where the market loses confidence in the Fed and heads for the exits.

James Bullard suggested continuing QE3 because inflation expectations are falling as seen in the TIPS yield. He thinks the economy will show enough strength in 2015, but is now concerned about how target inflation is falling below the fed's target rate. Thus more QE3 or even talk about it will hopefully push inflation back up to the fed's target rate. This sounds as if despite his hawkish talk about a 3% GDP economy, he is having second thoughts. Bullard is known to be hawkish as he has suggested higher rates as early as march 2015, but now he is concerned about falling inflation. Part of the problem is that all this bond buying from QE is perhaps artificially lowering TIPS rates, thus making it look as if inflation is below fed's target rate, when in reality, inflation is probably well above the fed's target rate as prices have noticeably increased over the last couple of years across a basket of goods.

Like what you read?
Let us help you make sense of these markets by signing up for our free Market Lab Reports:
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
Copyright ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing.
All Rights Reserved.
privacy policy