As detailed previously on this site, investors are looking to prepare for the end of Quantitative Easing III, the Federal Reserve program of purchasing $85 billion monthly in Treasury Bonds and mortgage-backed securities to stimulate the US economy with low interest rates and recapitalize the global economy.  Based on these fears, the stock markets have been falling after a very strong first quarter.

In today’s market action, all three indexes fell.  What should concern investors was the bearish push at the end.  The candlestick patterns below for the Dow Jones Industrial Average are long and negative, which is bearish.  That is confirmed by a bearish sentiment rating of 53% now.

In another post, it was reported that earnings will not be rescuing the market if interest rates rise.  As a result, dividend paying stocks and other interest rate sensitive securities have fallen.  After selling, investors are heading to the bond market to book the rising yields.

Previously, when minutes were released by the Federal Reserve that seemed to indicate Quantitative Easing III would be ending, the Dow Jones Industrial Average fell more than 200 points in a quick period.  But the market rally was rescued by Federal Reserve Chairman Ben Bernanke in an appearance before Congress.  There have been no such remarks to turn the tide around, at present.

It will be interesting, and pivotal, to see if Bernanke comes to the rescue of the stock markets, again.  He has posted his entire economic recovery program on the equity markets rising to create a wealth effect that will result in consume spending.  From that, it is hoped that the great American job machine will kick in again, as 70% of the US economy is based on consumer spending.

Do not be surprised in a statement from Bernanke again lets all know that Quantitative Easing III will continue which will, once again, rescue the financial markets.