Helicopter Ben has spoken – and the 10 year US Bond nosedived by about a full point – that’s $1,000.00 – and with over 2 million contracts outstanding – that sent more than a billion dollars to money heaven in a manner of a few minutes. We fully expect that the 10 year US Bond will recover a portion of that drop before the day is over. The currency markets also reacted significantly with the dollar gaining against most all other currencies. However, we never cease to be amazed at how the market can react so wildly to a shovel full of BS – especially when it was “expected BS”.

Bernake is trapped in a program that is not really working – but can’t stop because it would crater the equities market. This type of market action is best handled by observing from the sidelines. When the dust settles there will be money to be made from the larger than normal oscillations until the market finally forgets today and starts anew tomorrow. Be careful out there, and remember that volatility is a two edged sword!

 

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