Yesterday we saw a rare breakout to new highs by the D-J Industrial Average, confirmed by a surge to new record highs by the D-J Transports. In a "normal" market, this joint surge to new highs would be very bullish. But in today's manipulated stock market, is it really bullish?
With the bond market sinking, there is no place for a poor investor to go but to the stock market, and more specifically to the D-J Industrials, which includes some of the most consistent earners of stocks anywhere. The stock market has been rising on the basis of massive Fed stimulation. But wait, are we seeing a major change? Bernanke's latest announcement was of the Fed winding down its $85 billion in monthly bond purchases later this year, and ending the program entirely by mid-2014. All this would be based on good news from the economy, which the Fed expects. The ... Log in or subscribe to continue reading.
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