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Two Ways: What Will the Fed Do Next?


Strengthen your portfolio in good times and bad.


Fed Day

The Federal Open Market Committee (FOMC) will release a statement on the federal funds rate later this afternoon. But with the target rate -- for all intents and purposes -- already at zero, traders won't really be concerned with the direction. Instead, investors will comb through the statement for clues as to what other actions the Fed may take, such as quantitative easing and other strategies aimed at increasing the money supply.

In its previous 2 meetings, the Fed hinted at buying longer-term Treasury securities if it proved beneficial in improving the credit markets.

For more on the economy, see Professor John Mauldin's Tectonic Shift in Currency Markets.

From the Bull Pen: Is there increasing interest in gold stocks by the smart money? One can look to Newmont Mining (NEM). One option could be buying on a pullback to $35. A sell stop can be set 2% below that level.

From the Bear Cave: As Professor Lewis mentioned yesterday, those long the Ultrashort 20 Plus Treasury ETF (TBT) should exercise caution. One option is to take profits and return with TBT near $45. If and when.

Quick Check Around the World

Asian trading closed with the Hang Seng 1.86%, Nikkei 0.29%, India 1.27%, Taiwan 0.12% and Shanghai 0.24%.

Glancing towards Europe, we see the CAC 0.65%, DAX 1.14%, FTSE -0.44%

As of 8:00 AM EST, S&P Futures are trading -4 to 770, and Nasdaq futures are -2 to 1188.

A Look At Commodities

Crude oil is trading -0.69 to 48.47. Gold is -5.00 to 911.80. Silver is -0.30 to 12.640, and copper +0.80 to 173.20.

The dollar index is +0.015 to 87.3600.

On the Radar


07:00 MBA Mortgage Applications
08:30 Consumer Price Index (MoM & YoY) 0.3%, 0.0%
08:30 CPI Ex Food and Energy (MoM & YoY) 0.1%, 1.7%
08:30 CPI Core Index
08:30 Current Account Balance
02:15 FOMC Rate Decision

Click here for the full trading radar.

Let's get over the hump. Good luck, Minyans.

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No positions in stocks mentioned.

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