2.8% – that's what QE3 has bought us so far.
Last Options Expiration Day was August 17th and the S&P was at 1,420 and a month later we're testing 1,460 – 2.8% higher after Bernanke pledges to spend at least $600Bn and, of course, the ECB pitched in their own $600Bn and China dropped $400Bn and the BOJ added $200Bn of their own. All that for 40 points.
So what's the problem? Of course there was front-running, QE2 had front-running as well, with the S&P running up from 1,040 to 1,250 (20%) ahead of the actual announcement. That didn't stop us from heading up to 1,361 the next year – up another 9% before collapsing all the way back to 1,100 last fall (down 20%) into Operation Twist, which took us all the way to 1,422 (29%) before falling back to 1,266 this June (down 11%) when the Fed announced Twist would be extended and rumors of QE3 did the rest, running us all the way to 1,440 just ahead of the announcement (up 14%) and, as I mentioned, up to 1,460 now (up 1.4%).
As John Lennon would say, we need to give QEs a chance but clearly this is a little disappointing so far – especially with such massive, coordinated central bank action AND, did I forget to mention, the new IPhone is here! That's right, today is new IPhone day and, in the Appleconomy, what could possibly be more important than that?
Lines like the one on the left are in front of almost every AAPL store on the planet as getting a new phone on the first day it's shipped is really, Really, REALLY important to some people. We discussed the potential for upside in AAPL (we're already long) in yesterday's Member Chat and there seems little likelihood that AAPL will be holding back the Nasdaq NEXT Quarter, but this Quarter (AAPL's 4th) ends on the 29th and it remains to be seen how and when AAPL chooses to recognize these early revenues.
Earnings are on Oct 15th so we'll see what they have to say but, of course, we'd see any dip as another buying opportunity there. We took the dip in gasoline (/RB) to $2.80 as a buying opportunity as well and buying gas futures into the weekend is often a good bet and, at…