Key Takeaways A double top is a bearish technical reversal pattern. It is not as easy to spot as one would think because there needs to be a confirmation with a break below support. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear.
Investopedia does not include all offers available in the marketplace. Related Terms. Double Top and Bottom Definition Double tops and bottom are technical chart patterns that indicate reversals based on an "M" or "W" shape.
Double Bottom A double bottom pattern is a technical analysis charting pattern that describes a change in trend and a momentum reversal from prior leading price action. Shooting Star Definition and Applications A shooting star is a bearish candlestick with a long upper shadow, little or no lower shadow, and a small real body near the day's low. It comes after an uptrend and marks the potential exhaustion of the rise. Understanding the Inverse Head and Shoulders Pattern An inverse head and shoulders, also called a head and shoulders bottom, is inverted with the head and shoulders top used to predict reversals in downtrends.
What Is an Uptrend? Uptrend is a term used to describe an overall upward trajectory in price. Many traders opt to trade during uptrends with specific trending strategies. What Is a Morning Star? A morning star is a bullish candlestick pattern in a price chart. It consists of three candles and is generally seen as a sign of a potential recovery following a downtrend.
Partner Links. The QE policies implemented in the aftermath of the financial crisis of had a favorable impact on the prices of stocks and bonds in the U. As a result, investors were concerned about the impact of a potential reduction—or tapering off—of these favorable policies. Since tapering is a theoretical possibility—it has never actually been successfully carried out by central banks that instituted an economic stimulus driven by QE—it is hard to say exactly what impact tapering would have on the stock market.
However, in the past, it was widely believed that once the Fed began the slow reversal of its economic stimulus, the stock market would react negatively. In the context of monetary policy, tight, or contractionary , policy is a course of action undertaken by a central bank—such as the Fed in the U.
The Fed tightens monetary policy by raising short-term interest rates through policy changes to the discount rate, also known as the federal funds rate. The Fed may also sell assets on the central bank's balance sheet to the market through open market operations OMO. Tightening monetary policy is the opposite of expansionary monetary policy.
Expansionary, or loose, policy seeks to stimulate an economy by boosting demand through monetary and fiscal stimulus. QE is a tool of expansionary monetary policy. So, tapering refers to a reversal of one aspect of a loose monetary policy—QE—while tightening refers to the implementation of tight monetary policy.
The tapering off of asset purchases by the Fed can occur at the same time as a program of expansionary monetary policy. Even though both tapering and tightening are intended to have similar effects on market interest rates, they do not always happen concurrently. Federal Reserve Board. Federal Reserve Economic Data. Trading Economics.
Federal Reserve System. Accessed July 7, Monetary Policy. Federal Reserve. Your Money. Personal Finance. Your Practice. Popular Courses. Economy Monetary Policy. What Is Tapering? Key Takeaways Tapering is the theoretical reversal of quantitative easing QE policies, which are implemented by a central bank and intended to stimulate economic growth.
Tapering refers specifically to the initial reduction in the purchasing of and accumulation of central bank assets. As a result of their dependence on sustained monetary stimulus under QE, the financial markets may experience a downturn in response to tapering; this is known as a "taper tantrum. Central banks, for the most part, have not been able to sustainably unwind their expanded balance sheets. Article Sources.
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Related Terms. Fed Balance Sheet Definition The Fed balance sheet is a financial statement published once a week that shows what the Federal Reserve Fed owns and owes. What Is Credit Easing? Credit easing is used to relieve a market going through turmoil. Credit easing happens when central banks purchase private assets such as corporate bonds. Central Bank Definition A central bank conducts a nation's monetary policy and oversees its money supply. Non-Standard Monetary Policy A non-standard monetary policy is a tool used by a central bank or other monetary authority that falls out of the scope of traditional measures.
Taper Tantrum Taper tantrum is the term used to refer to the upswing in U. Treasury yields. Who Is Ben Bernanke? Ben Bernanke was the chair of the board of governors of the U. Federal Reserve from to Partner Links. Related Articles. Federal Reserve Open Market Operations vs. Federal Reserve Fiscal Policy vs.
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First released in , this was present Many Americans face this dilemma after graduating from college. For som An individual will be encountering and signing several different contracts such as an agreement to purchase a house or a car. But have you ever tho Furthermore, by offering a bond with the same terms as its initial series, the issuer can lock in covenants , redemption schedules, and interest payment dates.
This method of issuing additional debt was adopted by the British and French governments. Tap issues allow an organization to avoid certain transactional or legal costs and expedite fundraising. The issuer bypasses many of the initial formalities surrounding a bond issue, such as the prospectus , and proceeds to auction off the new securities. Issuing on tap is often suited for smaller fundraising attempts, where the cost of a new issue is too high when compared to the amount borrowed.
Fixed Income. Mutual Funds. Your Money. Personal Finance. Your Practice. Popular Courses. Bonds Fixed Income. What Is a Tap Issue? Key Takeaways A tap issue is when a portion of a bond issue is held back after it is initially authorized and later made available to the public.
A tap issue has the same maturity date, face value, and coupon rate as the original issue but is sold at the current market price. Many government securities use tap issues, such as Treasury bills, which allow the government to make the bond available to investors when market conditions are most favorable. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear.
Investopedia does not include all offers available in the marketplace. Related Terms. Bond A bond is a fixed-income investment that represents a loan made by an investor to a borrower, ususally corporate or governmental. What Investors Need to Know Before Investing in Callable Bonds A callable bond is a bond that can be redeemed called in by the issuer prior to its maturity. Zero-Coupon Convertible Definition A zero-coupon convertible is a fixed income instrument that combines a zero-coupon bond and a convertible bond.
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A tap issue is a procedure that allows borrowers to sell bonds or other short-term debt instruments from past issues. Tapering is the theoretical reversal of quantitative easing (QE) policies, which are implemented by a central bank and intended to stimulate economic growth. The phrase, taper tantrum, describes the surge in U.S. Treasury yields, resulting from the Federal Reserve's (Fed) announcement of future tapering of.