In focus: A crack in the dam?

By Lawrence G. McMillan

Ben Bernanke doesn’t have a lot of friends these days, and he lost some of those with his statements before Congress yesterday.

His indications that there wouldn’t be more stimulus threw a big monkey wrench into the tranquil world of the ever-rising stock market. His indications that there wouldn’t be another “QE” (which is probably a big fat lie) sent the dollar skyrocketing, taking commodities down (especially gold) and stocks down. Bonds also fell, because the government supposedly isn’t going to be buying any longer.

Prior to that the Standard & Poor’s 500 Index had been merrily rising slowly and steadily. It had recently exceeded the 2011 highs on both an intraday and a closing basis. Thus it was at its highest prices since June, 2008. However, with Bernanke’s comments (which perhaps were only significant because the market was overbought and nervous), SPX is back below those 2011 highs...

To read the full article, subscribe to The Market Watch Options Trader.