Wednesday, October 6, 2010

10/06/2010 Reflation Trade

Good evening traders,

I mentioned two days ago the reflation, inflation, quantitative easing trade will push the markets higher. I underestimated the amount of money the Fed would be buying. I learned today the Federal Reserve is now the second largest holder of US government debt. They are monetizing $11 Billion of bonds a week !

Stocks will go higher but physical commodities will certainly out perform. watch gold and oil especially. They have new gold E-mini contracts that allow you to buy 10 ounces of gold at a time. That's way to small for hedging. The speculators will flood the gold market and major dislocations will begin. A'la $150 a barrel oil .

Gonna make for some good trading this fall...


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