2012-09-26

QE3's fast failure?

In Why QE3 Will Completely Fail, I laid out the case that the amount of monetization by the Fed isn't enough to turn the credit market around.

I didn't make a short-term technical forecast because technical analysis is not my strength, but I did expect the QE3 rally would be shorter than QE1 and QE2. I anticipated a rally into or around the election, before turning south. Instead, the market may be on the cusp of falling lower. One can only guess as to the psychological effect of the stock market falling below pre-QE3 levels, but I'm guessing it won't be good for the bulls.

Here's a couple charts from Daneric's Elliot Waves, Elliott Wave Update ~ 25 September



Deflationists believe the Fed will be shown to be powerless and a less than two-week rally in the market following the QE3 announcement should strengthen the deflationist case.

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