what bernanke has done

I posted this on the ABU thread this morning (and since then I bought back my short term SLR at 3.48 because I wasn't looking for a large correction);

Bernanke has made things a little difficult for some of us that like to trade short term.

While not a problem for long term holders, I also trade some gold producers on pretty much a daily basis.
Therefore I am always looking for good entry points as well as profit taking levels.

While it is generally not that difficult to find a level on a chart or by watching an intraday price action to sell into and look for a pull back to re-enter later, Bernanke has thrown a very large spanner in the works. The biggest spanner I have ever come across.

I sold some short term SLR on Friday on the close, simply because it was up 7% by the close and it has rallied close to within 10% of its all time high (more than most). As well as that, the HUI looked short term overbought.
Normally a good excuse to take profits on short term trades in case of a pull back.
However The HUI just rallied another 2.8% over the w/e.

Bernanke has made this QE3 open ended with no time limit and no max amount, unlike the previous QE’s.
There are times when markets can remain "overbought" for long periods, not just weeks or months, but years.
Bernanke has just provided the best possible fuel for just such an event.
It will be very easy to see gold stocks rally a very long way with only small pullbacks and I think Bernanke has just made it difficult to predict corrections with confidence ahead of time.
This reminds me of the Nasdaq bubble where the Nasdaq looked overbought YEARS before the market topped. Only difference now is gold stocks are only looking very short term overbought and certainly not looking like they are in a bubble with most producers still 30-40% off their highs and with PE’s in the mid teens to single digits for most and the POG now likely resuming its long term uptrend.
This bull market should have a long way to go and much of that may be over the next few months.
There still are risks but central bankers have just removed some of the short term ones to allow a rally in any markets that have underperformed over the last year.
Gold and gold stocks certainly fit that category.