Posts by "qtmspin"

Ashraf, can you please explain how the fed printing money can raise stock prices? I seem to be hearing that alot on the news.

I do not understand how the money can go from their printing press to stocks? Is money being lent to the banks being invested in the stock market? Could you give a specific example of how $1 would go from being 'printed' by the govt, to buying a share of stock...

Thanks,
Matt

I hope that you understand I am not trying to predict the market. I think that is a foolish endeavor.

I believe that it is important to have possible scenarios thought out and a trade planned before the events happen. That way, when the event is unfolding I can take advantage of the opportunity.

I would never try to predict what and when the market is going to do something. I can however know with confidence if a scenario is unfolding in the same manner that I imagined.

IE: If govt buys bonds, the EurUsd will rise... this is my blog where I posted that a few weeks ago http://actionforexalerts.blogspot.com/2009/02/10yr-eurusd-correlationdoc.html

I greatly underestimated the speed and magnitude at which the market would react to that event.

Back to inflation:
I believe one possible scenario for USD weakness is the beginning of a decline in the savings rate. I will watch that economic indicator. From that point I will begin watching commodity prices, and have a bullish biases on commodities and bearish bias on the USD. I will also begin looking for the technicals that support my fundamental biases.

Matt