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2013/09/19: TrendView VIDEO Analysis: Equities & Govvies

September 19, 2013 Leave a comment

© 2013 ROHR International, Inc. All International rights reserved.

VIDEO ANALYSIS & OUTLOOK: After Market Analysis for Thursday, September 19, 2013

We have received extensive constructive feedback on our Video Trend Analysis and Outlook.  And in response to a significant number of requests, we are going to be splitting our blog posts into ‘TrendView’ with Videos and text-based analyses on one hand, and Commentary on the other.

The sentiment is that the TrendView analysis should not take a back seat (i.e. follow) to the often extensive Commentary. We appreciate this direction from you, and have begun after today’s US Close with a TrendView Video and brief bit of text-based Analysis and Outlook. We look forward to your feedback, and hope you find this evening’s analysis useful.

SPZ_130919_6030

The video timeline opens as usual with S&P 500 future, and then the govvies analysis beginning at 06:45 with some important futures expiration observations, and a return to the S&P 500 future for a final key short-term consideration at 16:40. And that’s it for this analysis with further comments below. This is an important follow up to previous views on the sharp reactions to the surprise lack of QE tapering by the FOMC.

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2013/09/19: Taper to come under Yellen, so Mr. B. spikes the punchbowl

September 19, 2013 Leave a comment

© 2013 ROHR International, Inc. All International rights reserved.

‘Mr. B’ …kinda sounds like a cocktail mixer brand, doesn’t it? “Mr. Bartender” evidently is not aware of a little nicety known as the ‘dram shop laws.’ For those who are not acquainted with this term, it applies to the liability attendant to serving liquor in excess to others. The ‘host’ or establishment must keep in mind they might well be liable for any damage the inebriated patron causes due to their intoxicated state. We wonder if the Fed carries dram shop insurance.

It seems that it should if it is to continue to extend the sort of unmitigated monetary stimulus that sends folks on an intoxicated chase for yield when short term interest rates offer none. It is not very critical of the Fed and its Chairman to inquire whether they have failed to learn the lesson of Mr. Greenspan leaving interest rates too low for too long. One of the things that great traders try to accomplish during their development is not just to learn the lesson of their last mistake, but also think about the variations of that error so as to avoid all (or almost all) of the variations in future as well.

As we noted in Tuesday’s Weekly Report & Event Summary Perspective (available via the link in the right-hand column), the Fed has also benefitted from some still reasonably mediocre US Employment data. That was a blessing in the form of an excuse to proceed with less tapering from the outset than might have otherwise seemed credible. And as many with the Fed had noted, and we agreed from the start, going from $85.0 billion (plus all that reinvested yield) to $75.0 billion would not have been a tragedy.

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