The chart below displays the 60' price structure of the S&P ETF SPY. We are trading right now at 132.06 in pre-market, just below the steep uptrend of this rising wedge.
So it looks like the buying pressure is over, and we have to wait for the Grill Session on Capitol Hill with Ben Bernanke and of course, the Fed Vice President Brian Sack who speaks on "Implementing the Federal Reserve’s Asset Purchase Program" (aka QE2) at the Philadelphia Fed, but the later will be after EU close.
I expect a change in the wording like previously on the MBS repurchase program but not on the FED funds, where the bottom line is that the core measures of inflation are still very low, and it is very unlikely that the Fed will raise the Fed funds rates this year. Of course, this is the same mistake like in 2005, when the FED started to raise rates much to late, in 2005 when the Dow Jones broke 11000. This time, the FED will probably not raise rates unless the Dow crosses 14000.
The FED could sound like this, which it did in previous asset purchase programs:
To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of....
or
Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first....
I believe that the recent break out to the upside have brought one common sense to traders: The only way is up and I am very smart.
