'Fed Trade' Is Melting the Snowball

If there were any doubts that the Federal Reserve had a hand in the market, those doubts have been erased. One never knows how the market will the end the day, but it appears that the market is picking up right where it left off last week. Over the past five days, the S&P is down by nearly 4% and the selling seems set to continue.

What you are seeing is simply the Fed trade underway. The selling is a liquidation of the all the "snowball effect" buying over the past couple of years due to quantitative easing. As a scientist might say, every action has an equal and opposite reaction. Thankfully, this selling won't take us back to the days of 2009 -- at least I hope not. The economy is clearly in much better shape, banks are healthier and have spent the past couple of years strengthening balance sheets and the housing market is stabilizing....267 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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