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Morning Market Briefing – Thursday- 10/10/2013

Yesterday, the Dow finished at 14802.98 (+26.45), the Nasdaq at 3677.78 (-17.06), and the S&P at 1656.40 (+0.95). The old expected news that Obama favored Janet as the next Fed Chairperson was finally made public by Obama. The bipolar market rallied just long enough to be aggressively sold off in the morning. Later in the day the bears found resistance around the 200 day moving average resulting in a rebound.

The Special Olympics in Washington continued as new backup athletes joined both sides of the stalemate. Every politician and pump monkey on TV agrees that a deal should be made and that the US should raise the debt ceiling. However, none of them care to negotiate. At the same time, every real investor knows that this fiasco in Washington is just a show that doesn’t really matter. The real catalyst for a market correction (or new rally) is/will be changes in the Fed policy.

Personally, we think this bullshit that is occurring in Washington is just a planned show. Bernanke probably explained to Obama how the market would crash to sub 10,000 within 3 months of tapering. So a show in Washington was staged to distract investors from the real danger and to give a reason for the Fed to keep QE infinity. The reason many are calling it QE infinity is because the minute that Fed stops intervening in the market, the market corrects fast and furiously.

Today, on no news, the market is rallying during the pre market session. One can only assume that the show in Washington is about to end and the politicians are buying ahead of the announcement. This is a great opportunity to sell high!

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