With the Fed having pushed the equity market up so much ahead of Wednesday's FOMC's decision, the 'no news' announcement, as expected, started a strong sell-off soon after the decision was announced.
Operation Twist
Operation Twist
The sell-off should continue unless the Fed keep supporting the market, as the "Operation Twist" would surely eventually kill the banks balance sheet, because the Twist kills the spread between the short and the long term yield, which is the bank's primary profit source.
The Fed does not have any more viable policy options to support the economy. The Twist may prevent banking meltdown now but it is just a matter of time before the whole monetary system collapses and would start off with banking crisis.
The Fed does not have any more viable policy options to support the economy. The Twist may prevent banking meltdown now but it is just a matter of time before the whole monetary system collapses and would start off with banking crisis.
For Thursday the sell-off that started on Wednesday should continue below 2300, with key support at 2200 then 2160-2170. On a hard downtrend, the next support below 2160-2170 is 2100.
