Quantitative Easing II ended this week. This was the deal where the Federal Reserve was buying Treasury bonds from the govt. 40% of the govt spending has been financed by the Fed through its purchases of govt. bonds. What will happen to interest rates now that the Fed is out of the picture.
Over the next couple of weeks I believe the stock market will start to contemplate that little problem.
Remember, the indexes are still trading in a range. Don't even think about buying until they make new highs, and hold those highs. And this has been too easy lately.......
This has been hard on the gold and silver markets. Gold and silver have a difficult time in a period of rising interest rates.
I can't help but think that rates rising may make it more profitable for banks to lend, and all of that money that the Fed has been shoveling to the banks may just see the light of day.... That would be a counter-intuitive outcome of rising interest rates. ie, inflation could actually get a foothold due to the money at last getting out of the clutches of the banks.
It may be awhile though.
Here are the gold and silver charts:
I'm breaking a few trading rules, but am long silver here. I use Silver Wheaton as my indicator/tell for the silver market. The intraday volume seems to be showing signs of accumulation. It telegraphed the move to the downside, lets see if it works on the upside.....
Control your risks!
So far so good!