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Strategies & Market Trends : P&S and STO Death Blow's
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To: chainik who wrote (7517)9/21/2002 6:24:11 AM
From: Justa Werkenstiff  Read Replies (1) of 30712
 
C: Re: "Justa, may I ask why you expect a rise into Tuesday meeting? I do not think the chances for rate cut are high; technicals are oversold but nothing like July bottom yet."

Don Sew has studied market events prior to Fed, meetings and the tendency is to go from either overbought or oversold into the midrange at sometime before the meeting results. This is not to say the meeting makes any difference longer term. It just happens. With this in mind, I see two scenario possibilities:

1. Further selling was thwarted by Friday's triple witch. Selling will resume Monday and get us down to 1200 or less and we will bounce higher into the Fed. meeting and then make the mover higher to 1260-1280 either before or after the meeting.

2. Further selling was thwarted by the Fed. effect grabbing hold of the market on Friday and this will carry through into Tuesday with a mild move up to 1250 or so with selling to resume after the meeting and a move to 1200 or below happening then.

I slightly favor the latter scenario but it is a tough read. So it is best to be in a position to react to what unfolds since we are in no-man's land (above 1200 but below 1250) with respect to a position buy or sell. So I am very small long but mainly cash.
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