"… the actual math on what the Fed can do… indicate(s) Ben's hands are very much tied, and the Chairman no longer can conduct the type of bazooka event that most have expected …our biggest worry: the Chairman is well aware of the math behind this analysis, and is the reason why month after month he has been forced to pull a 'Girl with the Draghi Tatto' and jawbone the market into submission,...UBS' Michael Schumacher (wrote)..."the Fed owns all but $650 billion of 10-30 year nominal Treasuries....Plowing ahead with a large, fixed size QE program could cause liquidity to tank.
Full article at...
http://www.zerohedge.com/news/scary-math-behind-mechanics-qe3-and-why-bernankes-hands-may-be-tied
JOHN HUSSMAN ON QE3
"...it is entirely
unclear that a further round will have much effect beyond an initial spike of
enthusiasm. That is, unless one adopts a superstitious faith that stocks will
rise in response to QE, since QE makes stocks rise, because QE equals stocks
rising, with no further analysis needed." http://www.hussmanfunds.com/wmc/wmc120910.htm
My Comment: All this takes
me back to last week's blog - Buy the rumor; sell the news. Don’t expect much from QE3.
JOHN HUSSMAN ON THE
MARKET:
"There are few times
in history when the S&P 500 has been within 1% or less of its upper
Bollinger band…coupled with a Shiller P/E in excess of 18…coupled with advisory
bullishness above 47% and bearishness below 27%…with the S&P 500 at a
4-year high and more than 8% above its 52-week moving average; and coupled, for
good measure, with decelerating market internals, so that the advance-decline
line at least deteriorated relative to its 13-week moving average compared with
6-months prior, or actually broke that average during the preceding month...”
“...Consider the chronicle
of these instances in recent decades: August and December 1972, shortly before
a bull market peak that would see the S&P 500 lose half of its value over
the next two years; August 1987, just before the market lost a third of its
value over the next 20 weeks; April and July 1998, which would see the market
lose 20% within a few months; a minor instance in July 1999 which would see the
market lose just over 10% over the next 12 weeks, and following a recovery,
another instance in March 2000 that would be followed by a collapse of more
than 50% into 2002; April and July 2007, which would be followed by a collapse
of more than 50% in the S&P 500, and today." - John Hussman, PhD,
Weekley Market Commentary, from Hussman Funds. Full commentary at http://www.hussmanfunds.com/
This time is different?
Probably not; there’s more downside risk than upside at this point, but we
could always see some further advance first.
Only time will tell.
MARKET
RECAP
Monday the S&P 500
finished DOWN 0.6% to 1429 (rounded).
VIX rose more than 13% to 16.28.
NTSM
The
NTSM analysis switched to HOLD Monday.
MY INVESTED POSITION
Based on the BUY signal, 6
July, I moved back into the market on 9 July (after the weekend) at S&P 500
1352.
I currently have a 50%
stock allocation overall. For my age,
that is what most advisors recommend as a fully invested position, however, I
am normally much more aggressive. I have
less invested in stocks now because there’s a lot of risk.
