July Minutes More Dovish As Predicted

The initial knee-jerk move is in (as expected) and I was surprised that Steve Liesman (or whatever his name is) pointed out as well that the initial reaction to the minutes is just a bunch off black-boxes and you can't really take initial trade too seriously as very few "humans" are trading on the information.

Overall, this statement had a MUCH different tone than the previous statement that was almost belligerent, this was much more carefully worded and much more dovish and the clear signal is a September Taper IS NO WHERE NEAR ASSURED, BUT THAT'S NOT THE BONE THE F_E_D THREW THE MARKET.

I wish I had the time to go through the 10-page minutes, but what I hear and need to get the exact details where the two things Wall Street is really concerned about (only retail is concerned with when the tapering begins-Wall St. knows it's coming no matter what), Wall St. is more interested at this time in guidance on WHEN INTEREST RATES MIGHT BE HIKED. 

Conventional wisdom is rates are hiked about 6 months after QE ends. In the July minutes, I heard there might be a "Lower unemployment threshold before raising rates", essentially saying "We were going to raise rates when unemployment hit "XYZ", but now we are willing to think about lowering the unemployment threshold giving you more time before we raise rates".

The second thing I heard that I didn't catch clearly, but was an obvious bone to Wall St. was they would hold off on interest rate hikes based on some inflation floor that could be put in to place.

Not only is the F_E_D throwing Wall St. a few bones that Wall St. is very much interested in, but they are making these new bones (still under consideration) MORE OBJECTIVE rather than the subjective yardstick that has been adopted since September of 2012 which gives Wall St. more certainty about guidance of future actions which is something the F_E_D stripped away since QE3 was announced.

I THINK THIS IS EXACTLY THE KIND OF STATEMENT THAT CAN DO WHAT OUR WORKING THEORY WAS, INITIAL KNEE JERK LOWER FORMING A LARGER BOUNCE HIGHER.