How Low Will the Dow Go?

Yesterday, the U.S. dollar rose sharply following the Fed announcement that
they would buy $400 billion of long-term Treasurys and sell short-term
Treasurys. But the impact of the new quantitative easing plan, which The Street
calls "Operation Twist," was a broad-based, high-volume sell-off in stocks
and commodities. As the Fed wished, long-term bond prices rose sharply, driving
the yields on the 10-year bond down to 1.871%. But investor confidence was
shaken badly by the divided decision of the board as three members dissented.