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turdburglar (41.75)

Rallying on "Fed hopes"?



August 23, 2011 – Comments (6)

Hoping for what?  Super QE where the Fed is going to step in and buy stocks?

I don't think you want to buy based on "Fed hopes".  That sounds like bullsh*t to me.  I say steer clear of the market until Bernanke speaks and whatever hopes are associated with him are in the past.

I think there are a lot of good stocks out there to buy and own even if a recession is in the cards, but I'd just prefer not to pay for "Fed hopes" along with them. 

6 Comments – Post Your Own

#1) On August 23, 2011 at 3:38 PM, outoffocus (23.06) wrote:

Maybe some news leaked.

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#2) On August 23, 2011 at 3:49 PM, turdburglar (41.75) wrote:

It doesn't look like a new leak rally.  If it was just one stock I could see it, but it doesn't seem to be that.

I predict a selloff coming tomorrow when the market goes "oh no!  The banks are holding some questionable assets like defaulted mortgages, European debt, foreclosed homes, overvalued commercial real estate loans, underwater mortgages, etc. 

But maybe I shouldn't be so negative.  I think I'll get some gold foil-wrapped chocolate bars and go stack them neatly in my safe.

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#3) On August 23, 2011 at 5:03 PM, Varchild2008 (84.20) wrote:

Well....Euro Zone isn't as horrifying as Wall Streeters thought and the stock market was bullish today because of that.

Asian economy still strong.

Corporations still posting solid earnings and many of which have optimistic outlooks (Salesforce for example).

This was an oversold bounce.

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#4) On August 23, 2011 at 5:03 PM, Jeffrey2012 (22.38) wrote:

It's pretty sad when the markets keep relying on the fed to save them. Not only that, but if there is no QE3 as people are hoping, boy are things going to get very ugly. 

Not to mention there is a lot of pressure on the fed to not do anything since they have already put in a ultra low rate policy for the next 2 years.

Just looking at Japan, their fed started buying stocks and look where that got them.  

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#5) On August 23, 2011 at 5:18 PM, turdburglar (41.75) wrote:

Agree on corporate earnings being pretty good.  I just think the market is more volatile right now than it should be.  It's manic-depressive.  Fed hopes?  Come on.  I think the market is just in a daily momentum mode where once the direction is determined we go all in for 3-5% in that direction.  I can see if Fed hopes resulted in a half a percent gain, but I think today's reaction was a bit overblown.  The selloffs have been the same way. 

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#6) On August 23, 2011 at 5:27 PM, davejh23 (< 20) wrote:

This will be the biggest sell the news event in history.  Next week is going to look a lot like the first week of August...Dow down 1,000 points.  We'll see the Dow in the 9K's within two weeks.

"Euro Zone isn't as horrifying as Wall Streeters thought and the stock market was bullish today because of that."

What news are you referencing? 

"Corporations still posting solid earnings..."

There have been solid earnings reports, but there have also been many weak reports and disappointing guidance.  Ratio of misses to beats has been the highest in quite a while.

The Fed will lose the last bit of credibility they've got if they announce QE3 and we still slip into recession.  They're not going to risk that.  If QE3 isn't announced, stocks will fall...if it is announced, it will be viewed as an act of desperation...stocks will fall.  We just witnessed the economy weaken dramatically right in the middle of QE2...maybe QE3 will be the tool to push us into a deep recession.

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