MDA - Market Direction Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis

SPY 689.49

0.0%

Jan 8 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Softechie who wrote (50705)	5/15/2000 2:54:00 AM
From: schrodingers_cat	Read Replies (1) of 99985

Thoughts on this week's market... Most seem to expect the Fed to raise by a half point, and I think that the market has already reacted to this. What really bothers me is the CPI number coming out the same day as the Fed meeting. Two scenarios... 1/ Low CPI and people say, "Well, I guess that bad reading last month was just a blip, there is no inflation, so maybe AG won't raise rates much more." This leads to a big rally in stocks. 2/High CPI and people say, "Uh-oh, this confirms inflation is a problem, so we are going to have lots more rate increases." This leads to continued weakness in stocks. Note that I am talking about the core CPI. The headline number will probably look good because of last month's fall in gas prices, but the market will focus on the core rate. Another point is that the market hates uncertainty, and when the economic figures and the Fed's action is known, the uncertainty will be gone and that will be quite bullish. OTOH I'm concerned about the sharp drop-off in trading volume (on the NAS) over the past week, almost as if some people have begun to fear and dread what the future may hold (for the NAS) while others are deep in denial. I'm not convinced that this is solely because of the Fed meeting. It might be the start of a general disillusionment with investing in tech stocks. I think I will stay in cash but if I had to choose I would go long on the basis that the NAS is at the low end of its recent trading range and the removal of uncertainty Tues pm should be good for a nice rally.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next