Very strong retail sales data and an upgrade of the economy by the Fed triggered a break out for the Dow which, in what may prove to be a pivotal day for the market, surged past 13,000 with a 1.7 percent gain to 13,177. This is the highest close of the recovery.
But the news isn't all bullish. Though no surprise, the Fed is not expanding QE3 and given the approach of the presidential election, the Fed may well be on hold for the rest of the year. Demand for Treasuries fell with rates rising sharply including a 9 basis point jump for the 10-year yield to 2.13 percent. Lack of new stimulus and rising rates are not good for gold which fell $30 to $1,670. Rising rates are good for the dollar firmed more than 1/2 percent against the euro and nearly 1 percent against the yen.
We are traders and masters of risk. When you become pro you stop over analysing and all you do is sit there, and wait, and wait, and wait some more until you find the perfect trade. What I am saying is that the market makes all the decisions. Our only decision is to listen, feel, and respond to the market’s siren. Always and without exception. Remember, the market never lies. It is only we who lie to ourselves.
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