Three Knee-Jerk Reactions to the Federal Reserve End of QE Announcement

Oct 29, 2014: 2:35 PM CST

The cross-market landscape reacted predictably to the end of the QE3 policy experiment and we’re monitoring follow-through from these initial movements.

Let’s take a look at three key markets and how they reacted to the expected news:

A quick, zoomed-in perspective shows a knee-jerk sell-off in Gold which was accompanied by a knee-jerk buying surge in the defensive TLT (Treasury ETF) and the US Dollar Index (seen here as the UUP ETF).

A broader perspective puts the knee-jerk reaction in context:

The Dollar surged as Gold collapsed under support.

US Stocks bounced around after the news but generally traded lower.

Keep in mind that the end of QE3 at the October meeting was not a surprise to markets.

Continue monitoring these typical movements – into Risk-Off areas – as the rest of the day develops and of course as we slide into the weekend.

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Corey Rosenbloom, CMT
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One Response to “Three Knee-Jerk Reactions to the Federal Reserve End of QE Announcement”

  1. Fed Aftermath Market Update and Stock Scan for October 30 | Afraid to Blog Says:

    […] a logical sell-off from a knee-jerk reaction to yesterday’s “End of QE3″ announcement (see yesterday’s post), stocks traded higher and broke sharply higher on a Bull Flag pattern earlier this […]