QE3? , AAPL short triggered

We received two similar questions last evening :

"What do you think about the inevitability of QE3, it may be a new and bigger kickstart for metals as well."

Agreed, however the key is "may be".

Recent past QE (click this text to read about it) experiments seem to have boosted both markets and metals considerably, however it's arguable that much of that boost was coincidental since the QE was done when the markets were due to rally for a long while regardless.

Even if the QE programs were entirely to credit for the run-ups in equities and precious metals in the past there's no guarantee there'd be similar results in the future, especially with markets at such lofty levels currently.

Will there be a QE3 at all? Given it didn't happen when markets tanked badly last summer, while unemployment was higher than it is now and price inflation was lower, and given that there is more division than it may seem within the Federal Reserve, plus a possible change of Fed president after the U.S. presidential election later this year ... we'll worry about QE3 if or when it happens.

If, due to further QE or not, the trends and technicals in equities or metals turn bullish, we'll go long. So too if valuations ever return to sanity. We concern ourselves far more with these tangibles than with the intangibles of government fiscal and monetary smoke-signals and fiscal or monetary voodoo, and we keep in mind that markets tend to eventually severely punish those who try to front-run a "sure thing".


Speaking of front-running, our short in AAPL was triggered today circa $505. See the posting dated February 09 for details. We'll cover on any close above $540 to try to limit risk to approximately 7% At the rate the stock is moving, that could be later this week. Certainly the uptrend remains intact, so either our timing will prove lucky or we'll (re)learn the hard lesson to wait for an actual trend change before betting on one. In any case, it'll be fun to watch.





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