Once again the markets are on standy by awaiting the fed wording to be released this afternooon at 2:15. Many people are making investment decisions these days on an extremely short term time horizon based on releases just like these.
The market typically zig zags on days like this. Bernanke will probably say "the fed will continue to monitor the situation and provide added stimulus as needed." or some variation of that. Its honestly just a headache. So the fed will sit on stand by then investors are initially disappointed no immediate stimulus so the market sells off, then they think it will come later so we move higher, and then generally the prior trend resumes if we don't break key levels.
To me it is a day to do nothing and wait until the dust settles. Call me an idealist but I still believe the market moves for certain fundamental and economic reasons but a market that moves a large amount in one direction or another every time a central banker in Europe or America has a press conference is growing closer and closer to just plain gambling.
These movements are mainly due to the fact that the gigantic hedge fund industry must be making constant profits for their clients to compete with their other hedge fund colleagues. The short term investing market is very overcrowded with day trading programs utilized by all the big firms on wall street and many hedge funds that can get in and get out of positions faster than you or I can click our mouse to buy something.
The best option for the average investor is to keep your eyes on the next 2-3 months and not be swayed by these announcements. I don't advocate very long term investment horizon approaches of years and years but certainly several months at least is needed for an investment decision to even have the ability to be a successful investment.
Goldberg Financial, LLC
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*****EDIT TO THIS POST WITH AN UPDATED PREDICTION*****
IF THE SP500 DOES NOT BREAK OVER 1440 AFTER TODAY'S FED STATEMENT OR BY THE END OF TOMORROW WE ARE GOING TO SELL OFF IN THE SP500