Monday Fed chairman Ben Bernanke told the National Association for Business Economics that the central bank had no intentions of raising interest rates in the near term.
Many analysists have been predicting that the low interest rate policy would probably end by the middle of 2013. To that end the yield on the long bond has risen over 50 basis points in the past couple of weeks. The major market indexes showed that they were in favor of the easy money as they rallied to recoup all of last week’s loses.
Mr. Bernanke said the bank felt the economy was still too weak to complete a recovery if interest rates were to be raised. The number of jobs being created might not be able to be sustained.
This policy doesn’t really help Average Joe, as only large corporations and financial institutions benefit from this type of strategy. As interest rates remain on the low end of the scale money for the small businessman remains tight.
We can trade this type of strategy as we always do, following the trend. The trend is your friend in any type of market and this one is no different.
Reacting to the market creates the opportunity that you seek, and that opening will give you the chance for profit.
To learn firsthand how I would trade a market that a change in housing could create and how it might mean a new opportunity, speak to one of my representatives and sign up to work one-on-one with me here:
Keep those stops tight.
Todd “Bubba” Horwitz
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