Posted Oct 19, 23:26

Far Too Soon for the All Clear

11 hours ago: 

Reading weekend commentary, you get a strong sense that many market watchers have called the bottom and expect a quick return to a low volatility environment.  In our most recent Premium trades, there are 2 GBPUSD with 2 charts after Monday's GBPUSD trades hit their final targets .   Full trades & charts are in the Premium Insights. We doubt it. Periods of extreme swings in sentiment rarely end abruptly. For the moment, Bullard has calmed worries by adding a 'Yellen put' to markets but how much of a delay in the taper is now priced in? Unless some leaks slip from the FOMC that say otherwise, we suspect markets will put about an 80% probability on a taper delay by the time decision day rolls around.

The thing is, if the Fed disappoints, markets could go straight back to kicking and screaming -- perhaps worse.

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PREMIUM INSIGHTS Update: Oct 16, 21:20
 
 
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What the Bullard Bomb Really Means Oct 17, 2014 1:51: 

Whether the Fed decides to buy another $15 billion in bonds through November is immaterial in dollar terms but it sends an extraordinarily powerful signal. Bullard hinted the Fed could delay ending the taper at the FOMC meeting at month-end. The comment reversed the rout on risk assets Thursday.   In today's Premium trades, we've issued 2 new trades in GBPUSD with 2 charts after Monday's GBPUSD trades hit their final targets .   Full trades & charts are in the Premium Insights.

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Yields' Fake Rally Oct 16, 2014 19:26: 

You know there's something inherently wrong with markets when each of the few recent rallies week was strictly caused by the Fed. Today's remarks fron St Louis Fed's Jim Bullard suggesting the Fed ought to consider delaying the end of QE is not a joke. Greek spreads are back and the yields dwontrend remains intact. Full charts & analysis.

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