(the title is said to the tune of Seinfeld's "Newman!")
The market already had staged a nice reversal, but this last push in the closing hour has come on the heels of a Jon Hilsenrath (read: the Bernanke whisperer) article saying (wait for it… wait…wait) "more Fed bond buying". At this point this should cause yawns but traders only know how to buy when these words are written. Despite a two month drop in markets after the last round of bond buying was announced. Old habits die hard.
Federal Reserve officials are likely to continue buying long-term mortgage-backed and Treasury bonds in 2013 as they confront a slow-growing economy and threats of new turbulence and uncertainty related to fiscal policy.
Nothing really new here – for the upteempth time, simply to replace Operation Twist which will run off, the Fed needs to expand bond buying as an offset.
Markets are currently stalled at highs of Friday/Monday but if they clear you should see stop losses trigger and a push. Whatever the case in the near term bears had their chance this morning and could not build on it.
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