Well, we got the additional easing that I didn't actually expect the Fed to announce. I guess the $1.8 Trillion fund managing Bill Gross was right. The Fed did offer more QE...
Market is reacting positively as expected by this kind of news. ES saw an initial gain of almost 12 points following the announcement. It since sold off 10 points providing a dip buying opportunity (in the event of a pro-QE announcement) like I mentioned in my previous post. Lets see how the market reacts to what Bernanke has to say at 2:15 EST. Watch it here.
An (open-ended) $40 billion / month agency mortgage-backed securities buying program by the Fed is significant and you have to favor buying the dips going forward. That being said, this comes on the heels of an already rallying market, one that has seen consistent gains since the start of June 2012. Be careful chasing this market. We could see a sell-the-news opportunity in the coming days. If that happens, consider it a gift, it is a buying opportunity.
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