The Fed giveth and the Fed taketh away. | stockbee


The Fed giveth and the Fed taketh away.

This rally started in December with Fed decision to pump in liquidity during the European crisis. A multi country easing operation was co-ordinated by the Fed. That started yet another liquidity induced rally in the market. We have seen this script before in last 3 years.

Now Fed has indicated as of now it is not keen on QE3 and so market is reacting negatively. But anyway market was doe for correction and was showing momentum divergence for sometime. This might act as a possible catalyst for a much needed pullback.

But the underlying setups and action still look god on number of stocks, so as of now this still look more like pullback/shakeout and it will likely be followed by another leg up.

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