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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Petrol who wrote (146184)1/25/2002 1:47:48 PM
From: GraceZ   of 436258
 
Its all about the Fed making a big coupon pass AND signaling that they are neutral and no longer cutting rates. Everyone is trying to get a glimpse across the valley, and they are thinking that maybe the Fed sees something they don't. Mostly it gets the market going up just enough that the buy stops get hit. You need orders booked above to get moving up. When long buyers start wanting to book below the rallies run out of steam (I want this, only cheaper and I'm putting my stop loss down here). As the rallies cool, this gets the shorts tasting blood. In comes the Fed with an injection of liquidity and all of a sudden you have buying above again, a la short squeezing.

This is why, while it looked like the market wanted to fall off a cliff it was too damned dangerous to go short. You had to figure they were going to throw the kitchen sink in right here.
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