Federally Fueled Thursday – Rally Almost Out Of Gas

One BILLION Dollars!  

That’s how much ADDITIONAL money the ECB begins pumping into the markets as of tomorrow morning per Draghi’s 33% increase in QE. That means, of course, he was already pumping $3Bn/day into the markets and that didn’t help but, clearly, investors believe somehow that this is going to be the straw that puts the camels back back together – or whatever it is unrealistic people believe these days…

Over in Asia, stocks are headed for their biggest monthly gain since October as our own Federal Reserve Chairwoman has indicated she is in no hurry to lift U.S. interest rates either and, of course, the FREE MONEY continues to flow in Japan and China – what could possibly go wrong? 

“A lot of the recent rebound has been down to the Fed back-tracking on rate hikes,” Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7.2 billion, said by phone. “We’ve seen a big rally but there are still some genuine worries out there. Markets had been overpricing some of the risks, whereas now they’re probably underpricing them.”

While Yellen’s dovish message from Tuesday continued to reverberate, Chicago Fed President Charles Evans signaled the central bank would tolerate above-target inflation for a “brief period” amid threats to American expansion from a slowing global economy. Futures now show no chance of the Fed altering monetary policy next month and only 45 percent odds of a rate increase by November.

Speaking of Futures, we took the money and ran yesterday on our Futures trades from last week’s Live Trading Webinar. In case you missed it (replay available here), we added Silver (/SI) at $15.2375 and got out yesterday at $15.395 for a $3,150 gain on the week and we also added Natural Gas (/NG) at $2.081 and took that money and ran at $2.212 for a $2,620 gain. Add that to the $400 we made during the webinar session and that’s +$6,170 gained in seven days after spending 90 minutes watching our Webinar!