The last time the markets became this difficult to time using the SharePlanner Reversal Indicator came on the heels of the Fed’s Quantitative Easing 2 (QE2). Now again we are getting various reversal signals before and after the QE3 announcement , and what you have is a perfect example of why federal centralized planning is a very destructive force to free markets, and financial markets in particular. 

Instead of letting the markets go where it naturally wants to go, you have the fed inserting an additional $40 billion in new money to the markets to buy mortgage-backed securities which ruins the dollar, spikes commodity prices (yup – including the price of oil/gasoline), forces seniors depending on interest-based incomes into riskier equity markets, and I’m pretty certain that even though the Fed refuses to consider the price of food costs and oil into its inflation number (they still think inflation is below 2%!), the next time you go to the grocery store, you’ll begin seeing a greater uptick in the price for your milk and eggs. 

So some of the whiplash we’ve seen in the SPRI lately might be the least of our worries. 

Here’s the SPRI.

SharePlanner Reversal Indicator 9-16-12 

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