Q: Why was the "market" way up today?
A: Because the US equity markets exactly track the EUR/USD on Forex as we have said every day. This has been a fact for about two years.
Q: Why was the EUR/USD so far up today?
A: Because the US FED (Federal Reserve Board) sharply reduced the valuation of the USD today; therefore, the RATIO EUR/USD rose sharply from the smaller "denominator" in the ratio.
Q: How was that accomplished - they say there was no money "printed"?
A: It was accomplished in a similar way (remember, nomenclature is important with the worldwide economy at stake) - the FED controls interest rates for banks, even foreign/European banks, holding USD (dollars) and the FED significantly and instantly lowered those rates.
Q: Why does that affect the USD value?
A: Directly because now you get paid a lot less from owning a US dollar so you are way more apt to sell it (devalue it in favor of the Euro.) Indirectly because it is a sign of more formal "money-printing" to come.
Q: Is that all good then?
A: No. The USD has been devalued again, the same thing that has been proven to NOT WORK for the US economy. The interest rate manipulation by the FED will not change any results, only cause a delay as we said in our 11/16 post.
Q: But should we buy-buy-buy equities now?
A: No. There may be a "funds-available" rise on Dec. 1; otherwise, see our prior recommended trade (11/16) and look for ways to capitalize on a new version.
