Velo, what do you think of this? -->
Trustee says :Dow had already negated the bearish rising
wedge before Fed cut rates. I agree with Hamingtons target of
10859 on Dow. Nasdaq set a higher high and could easily take out
2161 on the gap up open. Tremendous volume support of 3.1bln ,
the highest ever in history. But 28% rise already in few day will
call for a retracement soon as early as tomorrows highs and as
late as Friday from 2200-2300. First support on the pull-back will
be 2105 , 2nd at 2070 , third at 2031. of 2161-2255 range . On
S&P resistance at 1254 will be followed by resistance right upto
1298. LOCKERBEE SAYS : When the Fed cut rates
Nasdaq had started retracing from 2030 level. In retrospect now
the reason for massive gains from 1619 of 28% gains become
obvious. Fed openly gave the impression of no worries and no
intermeeting cut , but inside closed doors Fed was scared and
instead of applying rate cut on falling market applied it at peak, a
half volley for those of us familiar with cricket and hit a sixer.
Because of 0.25% rate already built in , Nasdaq did not attempt
2200 Wednesday and pulled back sharply from 2130 (end of wave
5 , as Jim rightly pointed out) . Abby remining bullish and cutting
S&P target to 1550 & slashing Dow target from 13000 to 12500.
I am a simple man and cannot understand , how a person can be
bullish and cut 500 poiints of the target simultaneously. Merrill
slashed S&P 12 month S&P target to 1570. Meaning they see
that in April 2002. But very coveniently they both fail to give the
low target during this period. 800 , 900 ? nothing , that they keep
to themselves . I bet all of them will be slashing their targets in the
months ahead. Did they not kow before ?. They know their
targets to the decimal point , but for us , rosy part only and then
taking it out petal by petal. Now come to Intel and other earnings.
Reduce the target to 1c below the known earnings days before.
Give the result +1c and forward outlook; slash once again.
Dressing up , 'manufacturing' process of earning presentation.
Recession has not really started officially and Joe Schmuck has
decided , that it has ended officially. If that was the case why
Greenspan needed to cut by 0.5% , 4 times from 3rd January. If
you look closely. 3rd January rate cut was at 2252. After 4 cuts
Nasdaq is still below that. So what we know about economy from
the Fed rate cut is that it is much worse that they appear to admit
publically. Looking further ahead , in my opinion Fed has only two
more rate cut bullets of 0.5% each left in its arsanal for remainder
of the year. Next FOMC meeting is more than a month away.
Whether Fed wants to spread 1% remaining cut into 3 or 4 parts
is entirely upto Fed , how it wants to play. Now you have heard ,
sell in May and go away (for Holidays) . In year 1999 & 2000 ,
from 3rd May peak to rest of the month markets fell. Will it not
happen this year as well ? Or has the investor left no money to go
on holidays :-). So we have to make a local peak around 3rd May
drop and again from 18th May into FOMC. To do both these
Market needs to drop to rise for those two occasions. And
Market has not yet peaked. Perhaps it will peak tomorrow from a
certain number which we will discuss. Also on first rate cut and
subsequent rate cuts market drops by roughly 10% from the peak.
All major rises of this huge historical size have been sold by
retracing 74 to 88% of the gains within 3 days to 10 days of the
peak. We have Friday of expiry coming up. Even if above reasons
were not present , good old profit taking has to start. So tomorrow
we start the pull-back , preferably within AM and even more
preferably after the first hour as Jim says the dumb money runs
out its course. The earliest point rally can start a pull back is 2142
and maximum at 2243 with 2181 in between . Canada , Hong
Kong(just now by 0.5%), Japan , Australia , UK have cut interest
rates and ECB is the only one oddman out remaining . So there is
still positive news to come.
Nasdaq resistance : 2130 , 2143 , 2182 .......2244
Support : 2105 , 2071 , 2022 , 1979
S&P , resistance 1254 , 1273 , support 1233 , 1214 ,
1191 |
