Don, i wouldn't be surprised to see the market rally into the FOMC meeting, as that would be contrary to expectations. while the massive call buying recently is generally a contrary indicator, it has also led to a lot of call open interest outstanding. that could easily fuel a short covering rally if certain strike prices are overcome by the major stocks. what's more, the "analysts" in Europe have started to whine this morning about the ECB's gold decision and several people have suggested the Fed 'should not raise rates as a downdraft in U.S. stocks with it's ramifications with regards to the wealth effect could endanger the nascent recovery around the world'. in other words it is now official that the Fed should keep the bubble going and the ECB should keep the mirror image of it, the bearish bubble in gold, going. what i'm trying to say is that people are now coming out openly to say these things. since the Fed is no stranger to political expediency, i fully expect that bubble maintenance will get in full swing, especially now that many stock indices are perched at precarious levels.
in view of this i will retract my bear claws for a while and adopt a wait and see stance for a while....oh yes, and i'm going to buy a few steel stocks. since the gold stocks have now rallied considerably, this is the most out-of-favor group. they trade at about 1/3 of book value have lots of cash, some have price-to-sales ratios of 0,2, etc.; the mirror image of the internet bubble so to speak, they should be rewarding for patient investors.
regards,
hb |
