Bernanke Plays the Ace


Author Larry Berman

Posted: 27 Mar 2012 re-posted from etfcm

Bernanke played the ace again yesterday in the face of other FOMC members talking about removing accommodation. In any case, it unleashed the quarter end window dressers a few days early and it took the market right up to the next area of resistance from the parallel channel of the lows from 2010 and 2011 projected from the 2011 highs is right around where we are going to open this morning.

Of note, mainland Chinese stocks (PEK) continue to falter and could be the leading indicator for this current phase of the market cycle—this should be on your front burner. The notion that the US can decouple from the rest of the world entering a slowing period is nonsense. Enthusiasm for US equities that can do no wrong and are being pumped by the US entertainment media (aka CNBC) gives us an almost giddy sense of benign neglect.

Investors looking to hedge the growing downside risk should avoid VXX for the toxic steepness of the futures curve and have a healthy mix of SPLV and SH to play the next few quarters.

 

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