Is It a Gamble to Inject a Junkie When He's High?
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Some might wonder if the economy/markets are becoming addicted to QE injections.
QE1 & QE2 took place after the 500 index had declined at least 15%. Now an injection has taken place during a rally, at 2012 highs.
Is it "Gamble" to make an injection when the markets are at highs for the year?
From a portfolio construction standpoint, are their other barometers to watch that can tell us if the injections are working at this time?
Copper and the yield on the 10-year note both rallied prior to the announcement of QE3! The rally took both of these quality barometers up to falling resistance lines.
Watch Copper, 10-Year Yields and Crude Oil to determine if the recent injection is going to push the economy higher!
(c) Kimble Charting Solutions