Dear Friends,
I am sure you know that I am a fan of Ben Bernanke if you have followed our investment blog. But as Ben retires from the FED chairman post, a new hero in Wallstreet emerged. or maybe heroine :).
It seems that Ben has trained and taught Yellen a trick or two how to motivate the Wallstreet guys, charm them into believing in the "Accommodative monetary policy" dream.
She says in yesterday Senate hearing that " it was difficult to tell how much of the recent decline in U.S. economic growth was due to weather, adding the central bank might consider a pause in its reduction of bond buying if the weakness persists."
Surely, we all know that winter is a seasonal effect and most likely it will be over in the next 2 months. Will the economy really cripple because of this cold winter? Does Yellen need to really stop the tapering just for these 2 months, so that US unemployment rate really heads for 2%? I don't think "weather" is the point. She is just a stock market manipulator!
Ha, I thought Bernanke is good with words, but Janet Yellen seems better! She uses the weapon of accommodative monetary policy everytime she appears to talk.
And it is because of this fact that we predicted Dow will bounce back from its deep drop in January. Those who have followed us have known that we predicted this quarter DOW and S&P500 will still hit historical high! And we think this run will continue after the historical high.
Indeed yesterday S&P500 close at a new historical high with a Yellen knockout verdict! It is DOW turn of making history again in the next few days.
It is unimaginable now to think how high the DOW will go! I know everybody is worried. But I feel that with such loose words about the monetary policy, this bullish run can't seem to stop!
Imagine if there are 2 months where DOW drop another 1500 points and the unemployment rate increases.
I am sure Yellen will not hesitate to put a stop to the QE tapering!
The market will bounce back hard then. And who knows, there is even chance that the printing of money might even increase $10billion if the situation get worse.
So my take for us now is to get in the game whenever DOW drop 10% from the top. This seems an unstoppable bullet train now.
Especially for the first half of 2014!
Rgds
Daniel
www.danielloh.com
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