Accommodation means $$$

As a retail observer of a much about hyped statement from the FED, the only thing you can do was watch the Euro/ USD and/or wait till the close to understand the confusing “Fedspeak".    After a breach of the summer range with the expectation of hints of QE2 this week,  you can’t be disappointed with the hesitant market action before or the days end result after the FED offered up a fresh liquidity pump, very likely to come in November.    In Fedspeak this was by one word ‘accommodation’.   The main reason being inflation not meeting their mandate after Core CPI data last week confirmed for FED, it‘s trending lower.   At the time, we noted…“If CPI comes in weak, it pull USD down and QE@ expectation will heat up into next weeks FOMC..”.  This is exactly how it played out today with inflation/ Euro/USD the focus points.   Despite stabilization seen in recent US data, inflation has subdued and this is likely to continue the FED’s statement expressed.   End result was the Euro exploding through resistance with USD under pressure,  investors ran to TSY's ahead of the FED doing so, Gold hit fresh highs and equities digested their recent upside.   It seemed like havoc on all asset classes with some whipsawing, but in reality it was the easy and natural trade.

As an equity trade,  we can’t be disappointed with a weak USD ahead, but as long as Gold makes new highs it keeps a sense of disbelief in this rally/market.   Also, we can’t be disappointed as long as 1130 holds, while putting this decision behind us and start looking ahead to earnings season shortly.  Market didn’t get hit by ‘selling the news’ and even if it didn’t bring those off the bench, we have to be somewhat relieved.