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Greetings,
The big question on everybody's mind is what happens when QE2 ends? Without the 'easy money' from Uncle Ben can Wall Street continue to push the market higher, or at least keep it from plunging lower? Many believe that Quantitative Easing will never end, in one form or another, as the risk of a huge market decline and a double dip recession over the short term far outweigh the long term risk of layering more and more debt on the books in order to stimulate a wealth effect from targeted assets, like stocks, that will get consumers to once again spend all of their money and run up their credit lines.
Obviously, efforts to prop up the real estate market have failed so, with a little help from the Fed, the other dominant asset class, stocks, have been targeted as the 'feel good' barometer. Get the stock market higher and maybe the $80,000.00 per year earners will feel more confident, start loading up on more 'consumer stuff 'and get the economy out of the doldrums and, hopefully, get companies to hire again.
Unfortunately, many of the $80,000.00 per year earners levered up a few years earlier on $400,000.00 homes that are now worth $200,000.00. Their meager 401K plans are still down from 2008 and many of those 'target' consumers are buried in debt, under water on their homes and stressed over whether they'll even have a job six months from now. There is pent up demand, but no money to spend.
Media pundits are constantly talking about record corporate profits. They push the notion that corporate coffers flush with cash and a booming global economy are telling us that there is no further need for Fed intervention. How do corporate insiders feel about that sentiment?
ZEROHEDGE.COM
Weekly Insider Buying And Selling: $2.8 Million In Purchases; $1 Billion In Sales
Submitted by Tyler Durden on 05/16/2011 16:23 -0400
There was once a rule of thumb that insider selling over 20x in any given period is bearish. We would be overly generous and say bearish is 30x, no 50x, oh why not: 100x more sellers than buyers. So what does a ratio of 351.3x sellers to buyers indicate? Because this according to Bloomberg is last week's insider activity in S&P500 names in the past week. Indeed, in the past week insiders purchased a total of $2.75 million notional in corporate stock, across 13 different companies, with the bulk focusing on Mead Johnson and Comcast. This was offset by a whopping $1 billion + in insider sales, as corporate officers couldn't wait to dump MetroPCS ($151 million), Sara Lee ($133 million), and, surprise, Microsoft ($127 million). Compare this to last week's insider purchases of just over $1 million and sales of $650 million and make your own conclusions.>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Recently, commodities, including precious metals and oil, have taken a tumble. The big question is now about to be answered. Could prices have rallied so high without QE1, QE2 and other gimmicks that debase the value of the US Dollar? Without 'grease' from Uncle Ben will real market fundamentals drive prices lower? Has POMO created a false reality?
 We'll know over the next 60 days but one thing is certain ... volatility will increase.
Stock index day traders love volatility because intraday pivot swings get larger and larger.
We are seeing that every day now trading ES futures.
THIS IS THE TIME TO TRADE THE ES!
On Monday evening the ES punched below a big number on the weekly chart ... 1325.
This was a number Pam has talked about over the last week, a key support number that has been breached. Yes, there will be a counter swing bounce back up, but after that things will really get quite interesting. We are now getting 4 to 6 handle pivot swings intra-day and things could get even more dramatic heading into June.
THIS IS IT FOLKS. You've been waiting for this and now it's happening.
DON'T MISS OUT!
GOT NUMBERS? GOT TRADE GUIDANCE? GOT A STRATEGY?
Sign up for our SUPER SAVER BUNDLE and take advantage of what is starting to unfold. Click the link in the Coupon box below.
Regards,
WDH
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