Technically Speaking: QE3 | Poster-Boy Update

By: Joseph Russo | Thu, Jul 14, 2011
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July 13, 2011 10:20pm ET

QE3 | Poster-Boy Update

Today, rumors of QE3 emerged from the release of the Fed-minutes and stocks took off like rockets. In the process, Gold pushed its way to a fresh new high, while the Dollar gave back most all of its recent gains.

Following the press release, Rick Santelli of CNBC described the Stock Market as a poster-boy benchmark measure of a recovering economy.

We suspect he was inferring that the powers-that-be, namely the Fed and Big Government, will go to whatever extremes necessary (QE-99?) to keep stock prices afloat, much like they have attempted to do with home values -yet another poster-boy property of our esteemed academic leaders.

Long before the headline release crossed the news wires stating that Moodys was threatening to downgrade US credit rating, the exuberance surrounding the prospects of QE3 had already begun to wane. After being up over 160-points by 11:00 am, the Dow gave back nearly 120 of those points to close up just 45-points on the day.

As a result of Moodys announcement, after hours futures moved down sharply suggesting that selling pressure will be bearing down upon equities at the open on Thursday.

If they weren't' such a bunch of academic-political blockheads buried deeply in intractable states of collective denial, we'd feel their pain. That they have manic and non-cooperative poster-boys on their hands should give them pause to re-think their cause, but we seriously doubt they will.


From our short-term trade setup posted last Friday (and shared on Wednesday), we have highlighted 20-points of downside captured upon tagging the 1315 target.

Over the short-term, it would not surprise us in the least if Thursday's selling pressure morphs into another Friday/Monday rally. Whatever our poster-boy delivers, look for a potential turn-pivot on Monday July 18.

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I trust and hope that you have extracted something of actionable value from this edition of Technically Speaking.

Until next time,

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Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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