Yesterday, when we first presented our calculation of what the Fed's balance sheet would look like through the end of 2013, some were confused why we assumed that the Fed would continue monetizing the long-end beyond the end of 2012. Simple: in its statement, the FOMC said that "If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability." Therefore, the only question is by what point the labor market would have improved sufficiently to satisfy the Fed with its "improvement" (all else equal, which however - and here's looking at you inflation - will not be). Conservatively, we assumed that it would take at the lest until December 2014 for unemployment to cross the Fed's "all clear threshold." As it turns out we were optimistic. Bank of America's Priya Misra has just released an analysis which is identical to ours in all other respects, except for when the latest QE version would end. BofA's take: "We do not believe there will be “substantial” improvement in the labor market for the next 1.5-2 years and foresee the Fed buying Treasuries after the end of Operation Twist." What does this mean for total Fed purchases? Again, simple. Add $1 trillion to the Zero Hedge total of $4TRN. In other words, Bank of America just predicted at least 2 years and change of constant monetization, which would send the Fed's balance sheet to grand total of just over $5,000,000,000,000 as the Fed adds another $2.2 trillion MBS and Treasury notional to the current total of $2.8 trillion.... more @ the link
“Be who you are and say what you feel because those who mind don't matter and those who matter don't mind.” - Dr. Seuss
Gold is falling like a rock so I was waiting for the next opportunity to short it. Today resistance was at $1585 and a trend line slightly above. Price actually broke above this level but only by $2. I considered it as a fake breakout and went short (2 contracts). In the m15 chart (below is the H1) you could clearly see the 200 ema was holding the price. This is when I got break-even because there was a chance for it to reverse. As the support level dropped I added to my position 1 more contract and moved my average price to break-even. I knew I wouldn't be able to move my stop fast so I didn't. It was a good decision again as price action was a bit choppy. Later I could place my stop where it is now. If it gets me out, it's still an OK trade, if it falls more, it will make me good money.
Looks like gold might come down to 1100$ soon on this short leg...
according to a credit suisse analyst.
After the slide of this morning (1380 to 1287) some further downmove might be an obligation.
Reasons are Heli Ben's statements yesterday that gold no longer is
a security to the markets.
UBS analysts made the same comment.