I have to admit that I, among many others, gave in to “herd mentality”.
Originally I had set my mind that the Fed will taper in December, but a few days ago I changed my mind to a September taper instead.
I got it wrong. No taper.
So what happens now?
Steen Jakobsen of Saxo Bank said to Market Watch:
“The most undervalued asset right now is fixed income [Bonds].”
Here is how Jakobsen is seeing how things will turn out in the months to come:
- “1,770 to 1,800 for the S&P 500 with a 30% correction after that, which may not be an enormous deal, since markets will have run up so much already.
- Gold at $1,525 an ounce, a peak for this cycle.
- 10-year bonds at 2.25% by the fourth quarter, with “serious potential for new lows in 2014.”
- A weak dollar into the end of December, with the dollar index at 78 to 79.”
Read the rest in full here: Post Fed: Told-you-so strategists tell investors where to go now
What is your opinion on the Fed Decision? Do you think they will taper ever, or will it be QE for long run? Leave your comments below.
Link to this post!
What a joke the Fed is. When are they ever going to learn that QE is just going to end in disaster! 30% correction is too optimistic.
Uncle Ben was keen to say how he is not in the business of surprising the markets! Still I would have thought inspite the economic woes he could have cut back a nominal amount just to get markets used to the idea. Some commentators are saying he is unlikely to do anything in December but wait until next year, so he will probably do something in December! But then again ….
Yes indeed, Uncle Ben talks a lot of talk, as we knew. Guess some of us forgot that including myself. December taper is still on the card – IF the economic figures continue to be positive. Cheers Mike.
Economic figures are fiddled. MOPE, MOPE and more MOPE. How can we talk about ‘growth’ when all we have to go on is a pack of lies?
I think we’ve got massive deflation going on behind the scenes.
It doesn’t matter if the fed tapers or not.
Almost everything is priced into the markets, and she will do whatevet she wants to do.
Our job as traders is to trade the price, not the news.
Cheers,
Ethan
Hello Alessio,
Too bad you gave only the Jakobsen insights but not the Faber’s ones on the same page…
For Faber: the Fed “already losing control of the bond market, the question is when will it lose control of the stock market,”
Namely, Jakobsen and Faber have opposite opinion…about the bonds.
Take care!
Does that make gold a good or a bad investment?