F_O_M_C Volatility-GLD as Easing Sentiment Indicator

As is usually the case, lots of volatility around any major F_E_D event, often there are knee jerk reactions that are reversed, sometimes that day, sometimes a day or so later, the policy statement usually sees more intense knee jerk reaction, but the minutes are a close second.

As for GLD/gold which is one of the biggest beneficiaries of easing as the $USD is diluted by printing (remember this also is a suspect event around the Euro action from earlier), the minutes thus far don't look too different from the policy statement, but this is what QE hopefuls are attaching on to:

SEVERAL ON FOMC SAID EASING MAY BE NEEDED IF RECOVERY FALTERS


and


MOST FOMC PARTICIPANTS SAW INFLATION SUBSEQUENTLY AT-BELOW 2%


The first is obvious, the second is almost a pre-requisite to more easing as easing has been inflationary.


GLD Initial reaction...

GLD like many market averages made a move below several support levels (although the GOOG trade is based on a larger head fake move, we see them on every timeframe before a significant reversal (significant is obviously relative to the timeframe).


The first reaction at 2 p.m. as the minutes were released was a big bar up on large volume. Gold tends to be a good indicator for sentiment toward easing. We'll have to let the market settle in a bit, but this may give us some answers.