FOMC and ECB Disappoint with Lack of Action


Author Larry Berman

Posted: 3 Aug 2012 re-posted from etfcm

The FOMC did exactly what we and many others suspected they would do yesterday—nothing! Washington did exactly what we thought they would do yesterday—waste time and money. Congress went through the motions to pass an extension of the “Bush” tax cuts so that when they are out politicking for votes in the coming months, they can blame the Democrats for not supporting the Bill.

The market should be somewhat disappointed that the ECB did not confirm or detail the bond buying plan. However, it had little response to the rate announcement and is waiting for the press conference, and perhaps Friday’s NFP report. A weak close Friday with 2/3rds of earnings in the bag (read the good news side) will turn the focus back to the global macro risks, which as all will know is a #()%!#$ mess. Aggressive traders can be short at the end of the weak if we close below 1375, a close above 1395 suggests a retest of the May highs.

A quick comment on yesterday’s mini “flash crash” caused by Knight Trading—expect more of the same as even more computers trade with computers.

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