Not to date myself, but I have been around long enough to know when the echo-chamber volume has become dangerous for investors. On Wednesday at 2:00 p.m. ET, the FOMC released the minutes of its last meeting, which showed that the committee is divided but overall were more hawkish than the consensus.
The chart linked below shows the market reaction. Since big money goes to the futures when immediate action is needed, the chart is of S&P 500 futures ESU6. The reaction is most visible on this tick chart, but tick charts are hard to read for those not accustomed to them. For this reason, I have applied Heiken-Ashi Technique for better readability.
Please click here for the annotated chart of S&P 500 futures.
For investors who do not use futures, a similar but less-pronounced reaction can be seen on the charts of popular ETFs the S&P 500 ETF SPY, Nasdaq 100 ETF QQQ, the SPDR Gold Trust GLD, and the iShares Silver Trust SLV.
The first reaction was logical, a down move in both stocks and gold because the minutes were more hawkish than the consensus. After all, both have been levitating on the hopes that the Fed will not raise rates for a long time. Then the echo chamber kicked in leading to a rally in stocks, gold, silver, bonds, euro and yen…Read more at MarketWatch.
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