Did the FOMC know about the PPI before the Rate Decision?
Posted on December 14, 2007
Filed Under Market Speculator |
Tuesday’s release of the FOMC target rate decision brought disappointment to many traders on Wall Street who were looking for 50bps. The leak to the media about a cash injection has only caused Wall Street to distrust the FOMC. Fast forward to Thursday morning prior to the release of the PPI numbers. Wall Street was definitely looking for a tame number, nothing outrageous…then bam! PPI vaulted higher, but did the FOMC foresee this when they released their rate decision? Consipiracy aside, inflation is the number one concern of the FOMC and my concern is how I position myself each day for the market.
Certainly now, we have a situation where the market isn’t in a clear direction. Clearly price action continues to diverge from volume. All the volume is to the downside with very little volume to the upside. One may conclude that we should automatically be positioning for the downside. However, the market keeps rising so what should I do? There is always an option other than go long or short the market and that is sitting on the sidelines. Its an overlooked option, and its one we should definitely look at!
Comments
Leave a Reply
