Well...its happening again. We are repeating the pattern that weve witnessed following virtually every Fed Rate announcement. The market gets spooked over nothing, the DOW snorts more crack and then days later the market wakes up, realizes nothing has changed and trading normalizes. I must remind you again, that FED does not control long-term rates (unless they manipulate). Under normal FED operations, the FED controls the discount rate and the FED Funds rate, both are very short term. Long term investors make their own desicions. IF the Fed tightens, short term rates will spike, long term rates will slide down and the yield curve will flatten. Why? Because raising short term rates will halt what little business borrowing we are seeing, the economy will skid...thus forcing down long term rates. Have any of the knuckleheads buying stocks thought about the long term implications of falling oil prices and the debt defaults we will see in this scenario. Did things suddenly get bettter in China, Japan or Europe? No, they are getting worse. We are a global economy! So, in summary...Yellen said nothing and the Market got spooked. This will pass. We need to hold 104.00. I expect to see price improvements over the next few days. However...I have not factored in any year end positioning traders may take. Have a great day
Posted on: Thu, 18 Dec 2014 17:03:32 +0000