MrB,
An interesting, preemptive strike by the Fed today, wasn't it? The question now is, will today's gains "stick" or was this merely some twist on the dead-cat-bounce maneuver?
My view, at this point, remains that the move is too little, too late. I think we will see mucho plenty more earnings warnings in the coming days and weeks. While opportunities may abound for the long term players (such as myself), swing traders may have a rough go over the next few months. Certain tech stocks are still waaay overvalued right now. While a lot of the excess has already been wrung out of market capitalizations, there is still lots of room for more pain in some equities.
I think you may see some euphoria over the next few days, a direct reaction to today's rate reduction by the Fed. But sooner or later, earnings WILL come back into play, and people WILL realize that the Fed's action will have little to no effect in the short term. It will take 6 to 9 months (that's 3 quarters for you lurkers) before any measurable effects will be felt in the economy. Since my viewpoint is that most investors today have short term horizons, we haven't yet seen the bottom of this bear market. I think that most of the "smart money" will remain in cash vehicles for now.
And that's the view from my perspective...
KJC |
