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IBDvalueinvestin (99.67)

"GREEN LIGHT TO BULLS"

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August 12, 2009 – Comments (6)

"GREEN LIGHT TO BULLS"

The FED. comments in today's FOMC meeting gives the Bulls the Green Light to keep the bull market going higher.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 bln of agency debt by the end of the year. In addition, the Federal Reserve is in the process of buying $300 bln of Treasury securities. To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

6 Comments – Post Your Own

#1) On August 12, 2009 at 2:34 PM, IBDvalueinvestin (99.67) wrote:

FED. says economy leveling off, a change from their previous comments that the economy was contracting.

This is proof that the economy has hit bottom and is now on the bounce back.

 

Watch as 3rd qtr - 4th qtr is going to see massive improvement in ISM numbers.

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#2) On August 12, 2009 at 2:38 PM, IBDvalueinvestin (99.67) wrote:

If you don't know what ISM data is? Here is a link to help you out:

http://seekingalpha.com/article/34247-new-ism-data-trading-economic-indicators

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#3) On August 12, 2009 at 2:41 PM, davejh23 (< 20) wrote:

No change of course is a "green light"?  This isn't a signal that the economy is looking any better...just that the Fed isn't going to do anything drastic right now that might stall a recovery.  Q3 and Q4 are going to show some suprise losses in financials.  The Fed has repeatedly made statements that show very little confidence in the strength of any near term recovery.

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#4) On August 12, 2009 at 2:50 PM, IBDvalueinvestin (99.67) wrote:

Chemical stocks are rising to new 52 wk highs that shows Industrial output is rising sharply from lows.

 

VAL, LZ, DOW

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#5) On August 12, 2009 at 2:57 PM, IBDvalueinvestin (99.67) wrote:

Residential index is up 4.28% today.

http://finance.yahoo.com/q/in?s=PHM

Another proof that the economy is on the verge of breaking out to the upside.

Pulte homes commented today that the housing market is the best its been today since  2006 or prior to housing crash.

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#6) On August 12, 2009 at 3:58 PM, silverminer (31.11) wrote:

IBDvalueinvestin

A touch of skepticism towards the words from Bernanke's mouth might be in order. :)

Since when did stock prices prove anything about industrial output?You must check in with what the CEOs have said in the recent results:

http://www.fool.com/investing/general/2009/07/24/the-new-floor-under-nucor.aspx

http://www.fool.com/investing/general/2009/06/25/dont-be-tempted-by-illusory-steel-demand.aspx

http://www.fool.com/investing/general/2009/07/21/reality-bites-the-us-coal-industry.aspx

http://www.fool.com/investing/general/2009/07/29/valero-would-like-to-cap-and-trade-its-losses.aspx

http://www.fool.com/investing/general/2009/07/27/runaway-freight-train-finds-level-tracks.aspx

http://www.fool.com/investing/general/2009/08/07/diana-shipping-coasts-along.aspx

 

Bernanke's words are evidence of nothing.

Quarterly results and outlooks, collectively, will provide the clear perspective you seek. There are no green lights, and our bus has already sped right through the intersection ... ignoring the sign which read: "CAUTION, BRIDGE OUT!"

 

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