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Differentiating Between An Irrational Market Or Strong Bull Market Trend?

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Guest post by: Kirk Differentiating Between An Irrational Market Or Strong Bull Market Trend? These past two weeks have been tough as an options trader. Differentiating between trading an a possibly irrational market or bull market trend is sometimes very difficult to assess. We all know that the stock market can push us to extremes and then, just when we “give up” and “give in” the turn happens. Timing is really everything. Blow-off Top or Pull-Back? Most traders I talk to are in one of two schools of thought right now. Either you think this is the best shorting opportunity for the … Read more

Bernanke Models Prove Faulty as Fed Forecasts Succumb to Downward Revision

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Chairman Ben S. Bernanke and his Federal Reserve colleagues are preparing to meet next week as two-year Treasury yields at a record low signal a U.S. economy on the knife’s edge between growth and contraction. Guiding their assessment of the outlook for the world’s largest economy will be forecasts contained in the so-called Teal Book, a confidential staff report with a blue-green cover. Policy makers’ confidence in those forecasts may be tempered as the course of the expansion has confounded their expectations. Of 12 Fed staff forecasts since the beginning of 2010, seven have been downward revisions to the near-term … Read more

U.S. Stocks Rise on Bets of More Stimulus; Treasuries Pare Gains

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Speculation that the Fed will embark on a third round of asset purchases to stem off a recession grew after the Wall Street Journal reported that three former policy makers support the approach. More than $2 trillion was erased from the value of global equities in the past week, and Treasury yields set new lows for the year, amid concern the economic recovery is faltering. Service industries grew in July at the slowest pace since February 2010 as orders and employment cooled, Institute for Supply Management data showed today. Full article provided by Bloomberg @: http://www.businessweek.com/news/2011-08-03/u-s-stocks-rise-on-bets-of-more-stimulus-treasuries-pare-gains.html

Fed Readies Guidance for Banks in Event Aug. 2 Deadline Missed

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July 29 (Bloomberg) — The Federal Reserve is preparing guidance for banks in the event the U.S. debt limit isn’t raised and the Treasury Department runs out of money to pay all of its bills, a government official said. The guidance would cover issues including how payments are made, collateral pledged for loans as well as other supervisory and regulatory matters, said the official, who asked not to be identified because congressional negotiations on the debt limit are still under way. A credit-rating downgrade of U.S. Treasury securities caused by a failure to lift the $14.3 trillion debt ceiling would … Read more