Week Ahead<\/p>\n
I think everyone understands not to fight a bullish trend, but at some point the manipulation has to stop.\u00c2\u00a0 Quite frankly, I have thrown my hands in the air to try to see what is moving these markets higher.\u00c2\u00a0 I see nothing but mediocre news that gets dripped to the average consumer in campaign like style.\u00c2\u00a0 Earnings for the most part have been great.\u00c2\u00a0 Corporations have benefited from the lower employment costs, low interest rates and flat demand.\u00c2\u00a0 Investors tend to believe the overinflated forecasts by these corporations.\u00c2\u00a0 Fedex was a prime example a few weeks ago when they changed their flat outlook to bullish.<\/p>\n
I continue see deterioration in every important aspect of our lives.\u00c2\u00a0 Increasing home foreclosures, stalled consumer spending, decreasing commercial RE valuations and loans, money supply dropping like a rock and no improvement in site for unemployment.\u00c2\u00a0 When we are faced with such overwhelming bad news, then we have to take a look at what could potentially be driving institutions to buy.\u00c2\u00a0 Why would there be such overwhelming support in an economy with such a lousy outlook?\u00c2\u00a0 They know something.\u00c2\u00a0 Something that will be explosive in nature and something that we should be prepared for.\u00c2\u00a0 After digging into some stories and talking with partners it seems that Tuesday could be the day of major news announcement.\u00c2\u00a0 The rumored announcement is that we will have some form of another round of quantitative easing.\u00c2\u00a0 The FED will most likely announce it on Tuesday in some type of correlated effort with Fannie and Freddie, which coincidentally were left out of the latest and greatest Financial reform so they can continue to manipulate the dog and pony show.\u00c2\u00a0 Some have said it will be a coordinated joint international effort, but it will most likely start here at home.<\/p>\n
So what does this mean for the market? If there is\u00c2\u00a0 QE2 event as it is being nicknamed, (Quantitative Easing 2, not the cruise liner), we could potentially see a huge hyper extended rally that gets all of the shorts out of the way.\u00c2\u00a0 The would make it seem like the next big bull leg, but we know what it truly is another attempt to revive our economy.\u00c2\u00a0 All mainstream media outlets have been pushing that our economy is cruising along fine, but given the deterioration that we have already discussed we know that it is simply not true.\u00c2\u00a0 Public perception is important to keep the hopes and dreams alive.\u00c2\u00a0 Peggy Noonan recently wrote a piece in the WSJ about how the dream that our kids will have a better future then we did has basically died.\u00c2\u00a0 Sad..but true.<\/p>\n
So please be prepared this week for some major moves.\u00c2\u00a0 Volatility will most likely get crushed with a large positive move in the broad markets.\u00c2\u00a0 Buying front or second month options will be the quick play.\u00c2\u00a0 The move could last for a couple of days to a couple of weeks.\u00c2\u00a0 Ideally we will be able to take advantage of the quick move then look for the markets to settle in.\u00c2\u00a0 If reality hits and the market does not like QE2, then we still most likely see a rally, but it will fail to puncture the resistance quickly. It may take several days to get through the resistance pivot points.<\/p>\n
![\"QE2\"](\"http:\/\/www.cheapiv.com\/wp-content\/uploads\/qe2.jpg\" "\\"qe2\\"")
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