Dancing with the Fed

Once again all the economic data is showing sign of weakness. China GDP came at 8.1% much less then expected, where as previous day it rallied after China GDP was leaked above 9 %. Jobless claim is back to 380k. Bad news has become good news as the new round of QE3 is anticipated by the market. Below is the chart which shows Fed balance sheet and S&P500 relation. Fed has pumped enough money into the market and it has created a bubble itself. No QE3 would mean either fed might increase rate or they will take out money from the market which the big institutions doesn't want this to happen soon as they are getting money at 0 interest rate and making good profit. Fed is nicely trapped in its own web and it has to dance on wall street tune.

Fed Balance sheet from 2003 - 2012

The key break point in Dow for upside is 12927 and S&P500 is 1279, if it breaks then stock is going higher while if Dow break 12800 on downside, then stock will check its major support at 12683 and S&P500 key breakpoint on the downside is 1365.

Dow 1 month Chart

Dow 3 month Chart

Economic Calendar 

Retail Sales  (0.3% is expected higher will be bullish while lower will be bearish previous month was 1.1%)

8:30 AM ET

Empire State Mfg Survey  (18 % is expected higher will be bullish while lower will be bearish previous month was 20.21%)  8:30 AM ET

Treasury International Capital  9:00 AM ET

Business Inventories (0.6% is expected higher will be bullish while lower will be bearish previous month was 0.7%) 10:00 AM ET

Housing Market Index (29 is expected higher will be bullish while lower will be bearish previous month was 28) 10:00 AM ET

Once again all the economic data expectation are lower this week, let see if the data are able to beat it. 

Stock market is looking bearish at the moment and sell off is likely to continue this week.

Avoid buying stock ahead of earning, you could lose money even if you guess it right.

For Day trading watch out UVXY, SVXY, FAZ, TZA, FAS, TNA.
For Long Term play watch out NOK, PCX, WLT, GLD, HGSI, DNDN