It was another big week in the markets with QE3 being announced by Big Ben on Thursday resulting in a huge rally in risk assets. One of the funnier quotes I saw about QE3 was that apparently Bernanke played a lot of Monopoly as a kid, here is section 1.1 of the FAQ:
The timing of QE3 has a lot to do with the upcoming election and while it will boost stocks in the short term, I am really concerned about the long term consequences. It’s important to think about the impact QE1 and QE2 had on the markets in order to see what impact QE3 might have. David Rosenberg of Gluskin Sheff had this to say:
Also keep an eye on the US dollar this week. You can see below that UUP has sold off sharply and broken below key support. There was a mini reversal on Friday, but it would want to retake the $21.75 level pretty quickly in order to be called a false breakout. UUP is quite a long way from the 50 and 200 EMA’s and is oversold on stochastics and RSI.