ES closed at the 1156.50 area without much change from its previous close. Without Fed “QE” funds involved, the market seems barely alive. How does QE work? Please see this article by Martin Hutchinson: http://moneymorning.com/2010/10/07/qe2/
Based on price movement, ES still stretches itself in the top area to await QE funding. Nobody knows if or when the latest official quantitative easing will be announced. To use the significant fact is this: despite trillions of dollars plowed into QE, with the real possibility of more to come, perhaps at the FOMC meeting on election day, the current price is barely being held up. If the crash occurs, the decline will be very hard and very fast.
All markets are being hyped by this QE program. So far the movement looks similar to the move of the year 1986 before the crash in 1987. We should watch our step carefully in the coming days and weeks.
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ESZ0 Intraday – 60 minute bars
