ETF Trading with Larry Connors: The Wisdom of Ben Bernanke
Interesting weekend on the east coast. We’re grateful the storm was much tamer than predicted.
Bernanke’s speech on Friday showed much wisdom. By not doing anything, he sent two messages. One, the economy isn’t so bad that it requires immediate Fed intervention. The second is that it buys the Fed time to see what the economy brings. As we’ve seen over the past 6-8 weeks, the economic and corporate reports range from a slowdown to a slow but sure recovery. With such a mixture, Bernanke took the prudent route and now allows for time to pass.
In the absence of any meaningful news, it will be interesting to watch how the doomsayers, along with the many hedge funds who are massively short, will respond. Historically when this has occurred, prices moved higher as the selling was already done. Money then gets put to work and then short-covering occurs. Also with a low volume likely coming this week due to the long weekend, it’s easier to squeeze these guys out. You could see that occur on Friday.
The above is from Larry Connors’ Daily Battle Plan.
To learn more about the Daily Battle Plan – including access to Larry’s daily ETF trading signals, click here for more information.
And for more on ETF trading, be sure to visit us here to check out the book that Stocks, Futures and Options (SFO) Magazine called one of the best trading books of 2009: High Probability ETF Trading: 7 Professional Strategies to Improve Your ETF Trading.
Larry Connors is founder and CEO of TradingMarkets.com.