The futures were pointing towards a lower open this morning as Wall Street awaits the Fed’s expected plan to buy Treasury bonds. Weaker corporate earnings from a number of heavyweights have also added to the selling pressure while a better-than-expected housing report failed to ignite a rally.
The talk of the Fed’s quantitative easing program (QE2) has been priced into the market over the past few weeks and there’s a level of concern that if they don’t run the money presses at full speed it will hurt the market. The Fed’s plan is to buy Treasury bonds as a way of stimulating the economy and many market pundits are anticipating the Fed will buy between $500 billion and $1 trillion in bonds to do so. Of course, the talking heads are questioning it won’t be big enough to make an impact.
We have mentioned the Fed meets next week for a two day meeting and they are expected to reveal how much deeper they are going to put America in the hole. As far as the market, honestly, it may or may not matter how much they pump into the economy but the bigger the number, the better for the world. At least that is what “Timmiieee” and “Big Ben” will tell you.
The Commerce Department said New Home Sales came in at 308,000 units versus expectations for 307,000. There was little response to the “good news” as investors realized we are a long way off from a healthy recovery.
As a result, the market is at its lows for the day and is testing support.
The Dow is down 124 points to 11,045 while the S&P is off by 11 points to 1,174. The Nasdaq is lower by 13 points to 2,484. We are expecting an end of week rally over the next two days and our current trades are showing some good price action despite the market’s woes today.
We have two current trades that we are expecting big news from this week and next. Subscribers, check the Members Area for the updates.]]>