As Vinnie Barbarino (John Travolta) often said on the TV Show Welcome Back Kotter, “I’m confused”. Trying to figure out this market with either side of the brain is getting to be really difficult. First Bernake says that the FED “might” start tapering QE towards the end of this year “if” economic data indicated that the economy was on the way to a self sustainable recovery. The markets – seemingly all over the world – did a swan dive. The S&P – our well known stock index dove from a high in the mid 1600s to a low in the mid 1500’s. All that action, even though a cursory examination of economic data would tell most reasonably intelligent individual that the economy is not doing all that well. And there were those not committal words of “if” and “might”. The FED knows know they cannot keep QE up forever – but they also know that when it stops the markets will crash big time. They are between the rock and a hard place – and they know it. Bernake’s only chance for saving his “face” is to try to get our before the end comes and blame his successor in not acting in sufficient time. Could that be why he made his “announcement blunder”?

Now, a few short days later, with scant new data to account for it, the market has suddenly recovered much of its loss – the S&P returning to the 1600 plus level. Nothing much has changed – the economic data keeps indicating that our economy is holding its own- but just barely. So like Vinnie Barbarino, “I’m confused”. I truly don’t know what to make of it. Oh, well, as Scarlett O’Hara famously said, “I will think about that tomorrow”.

Of course, as a short term trader, I don’t really care which way the market is going – only that I am trading in that direction. But I just can’t help but think of all those people that have their financial future invested in this crazy market.


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