Federal Reserve Raises Discount Rate


The Federal Reserve Board on Thursday announced that in light of continued improvement in financial market conditions it had unanimously approved several modifications to the terms of its discount window lending programs.

Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve’s lending facilities. The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy, which remains about as it was at the January meeting of the Federal Open Market Committee (FOMC). At that meeting, the Committee left its target range for the federal funds rate at 0 to 1/4 percent and said it anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. Continue reading »

Dow Jones -Hurdles :10209-10315-10350

Double Bottom at 9774-9757 ?

Yesterday spurted by 273 points and closed at 10172 level.

Now ,What to expect ?


Just Watch :10209 level

Crossover above this level will take to recent high of 10315-10350 level.

The level of 10412 is Major Hurdle for Bull’s

Three Consecutive close above 10412 wil take to 10630-10703 level.

I will Update about Nasdaq Composite ,S&P500 in afternoon

Updated at 5:37/11th June/Baroda

S&P 500 -Makes New Record :14 Straight sesssions

Short Term Hurdle :1176- 1182.50 level.

Major Hurdle :1177 level.(Complete correction from 1576 to 666)

-Three Consecutive close above 1177 & weekly close above this level will take to 1347-1404 level.

Suppose above mentioned condition is fulfilled then no Major panic is ruled out across Globe.

-This is 13th Month from low of 666

-On going Month is 30th Month from 1576 …so another 4 month or 4th month major Turning ?

-Either rally will get over in this month and sharp fall will start or Nonstop rally above 1177 will continue ?

Updated at 5:50/18th March/Baroda

JPMorgan Chase :Markets are overbought

“Although the SEC fraud case does not have direct implications outside Financials, the rise in uncertainty is negative for equities at a time when equity markets are overbought. Technicals have been pointing to overbought equity markets for some time now and Friday’s correction has the potential to drag the S&P 500 down toward 1175 in the near term. But our technical strategists see very little chance of the S&P 500 falling below 1150, i.e., the January high, over the coming weeks.”

Source: JPMorgan Chase & Co. (Public, NYSE:JPM)

Please note that JPMorgan Chase & Co. (Public, NYSE:JPM) has been dead right on their market calls, as the Pragmatic Capitalist points out in his website, “few of the big banks have traded the recovery as well as JP Morgan. They nailed the reflation trade and they have subsequently been dead right about the reflation trade transforming into the recovery trade. They’ve recommended that investors pile into the highest risk names in the market and its been a winning trade since.”

Kiss That V-Shaped Recovery Good-Bye: The U.S. "Worse Than Greece," Says Economist

There’s been many letters and symbols used over the last year to describe the shape of the U.S. economic recovery.  There’s the strong V-shaped recovery; the square root shaped recovery to connote a strong recovery followed by a period of flat to no growth; and the W-shaped recovery favored by those believing in a double dip recession.

Tech Ticker guest Michael Pento has a new twist on the discussion. Pento, senior market strategist with Delta Global Advisors believes this is a tee-pee shaped recovery with the top of that tee-pee having already formed in the fourth quarter.

Pento is negative on America’s near term economic prospects for three main reasons:  too little bank lending, too few jobs and too much public and private debt. “I’ve never seen a v-shaped recovery occur when commercial bank lending was down 7% year over year.  So, small business are not getting loans to create capital goods and to expand and hire individuals,” he observes.

Exacerbating the problems at home, is what he describes, as a weak economy abroad.  With China looking to clamp down on growth, the EuroZone struggling with its own debt problems, Pento asks, “Where is the growth going to come from in demand from overseas?

When he says “demand” he’s referring not only to products and services but also to our growing debt burden.  As the price of servicing our deficit grows, when the Federal Reserve tightens monetary policy, Pento is confident others will realize what he already does: the situation in the U.S. is “worse than Greece.”

The way he sees it, there’s a strong potential for a bond and dollar crisis when China starts selling Treasuries.  “Tell me which shape recovery that will yield for the United States?”