The Pattern Changes
For a number of years the market would usually rally when Fed chief Ben Bernanke had something to say. Lately, the pattern has changed and we are seeing a negative reaction to Dr. Bernanke, even though he continues to talk in a market-friendly manner. The problem is that he no longer has the keys to the printing press and can't continue to provide the flood of liquidity to which the bulls have become addicted.
The market sold off hard after Dr. Bernanke's comments and now the SPDR S&P 500 (SPY) is working to regain its 200-day simple moving average. As I have commented before, quantitative easing programs have given the market so much buoyance in the past, but we don't have it this time. The bulls' big hope is resolution of the fiscal cliff crisis but even then we still face major worries about slowing earnings....92 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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