The Dow's huge move on 11-30-2011 was, by the way, a mistake by investors.
Yes, the Dow was near-term oversold - which was the reason I'd returned to it. But the 500 point jump on Wednesday was primarily a reaction to several Central Banks moving to calm EU fears. In particular, investors were jazzed about the U.S. Federal Reserve's action.
But the Fed didn't really do very much. They said that they were cutting the interest rate they'd charge EU banks for loans in half. But is that really that significant?
In September, the Fed offered to lend EU banks UNLIMITED funds. In response, the EU borrowed a whopping $2.4 billion. That's it. $2.4 billion in two months.
Now, because the Fed is "slashing" the interest rate from 1 percent to 1/2 percent, we're supposed to see these EU banks that weren't previously interested in borrowing from the Fed lining up? I don't think so.
So, the level of assistance provided by the Federal Reserve will scarcely change. Due to their announcement of THAT, investors pounced and the markets jumped 500 points??? Hah! Joke's on them.
The Fed often moves the markets with nothing but words. That's what happened Wednesday.
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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