Tomorrow is Fed Day

The fireworks should start at 11:15 am
The only issue will be how the Fed handles Quantitative Easing (QE) (inventing money).
If they decide to say something like “we are going to buy bonds tomorrow”, then you will most likely see the Dollar fall, Interest Rates implode and Gold launch.
If they say nothing specific and just make another general reference to the potential of buying bonds at some point in the future, then you may see the Euro fall, Gold fall and Interest Rates rise.

The goal of QE is to be considered irresponsible when it comes to future inflation, so I would expect to see some statement that lets everybody know that Helicopter Ben has taken to the skies and is about to carpet bomb the country with new money.

I expect wild gyrations in price tomorrow and I think there is a real possibility for multi-day to multi-week moves to occur in the US Dollar/Euro, Long/Short Gold and Long/Short Treasuries. I will have stops in place to participate in whichever direction the Big Money Crowd decides to deploy money.

I got stopped out of my short in financials (FAZ). I lost $37 on the trade. You can be wrong, just do not stay wrong! I will look to reload in FAZ in the low 30’s to high 20’s.

I have been very Equity-averse this year. I just don’t trust the bs coming out of Washington and the mouths of the CEO of companies (GE, GM, Citi, Bank of America). The longer they are allowed to flat out lie to the investing public and get away with it, the less of a chance the market has to make a sustained, multi-year rally.

Did you see the news release today, where the Government told us that “New Housing Starts” were up some gigantic percentage? Did you know that a huge chunk of the new starts were conversions from Condos to Apartments? Did you know that those count as “New Housing Starts”? Me either.

So all of those vacate high-rise condos that now dot most cities are being converted into apartment buildings, because nobody wants to buy the condos. Each new apartment conversion is considered a new home. What a joke…