VOLTAIRE'S PORCH-MODERATED Message Board

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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: Dealer who wrote (25524)	12/16/2000 11:49:32 AM
From: Dealer	Read Replies (1) of 65232

STOLEN STUFF: Fed from: Rande Is Dec. 16 DO and all. . . .yes, I think Monday will see a major selloff, perhaps gap down, but most likely a gap up to trap more longs then a late afternoon drop of terror. . . this would be consistent with the 4DML that is evident. It is the drop of terror that would set up the big buying opportunity, IMO. It is because, as you put it, " marketwatchers think Fed will NOT lower interest rates on Tuesday ". . . that I believe we will not rally until after Greenspan gives us some sort of green light. The choices are vast. . . 1. No change and no bias change [what the bears say they want. . .but this would damage our economy considerably, IMO] 2. No change with move to neutral bias [the consensus of opinion] 3. No change with move toward loosening bias [what's the sense?] 4. 1/4 point decrease with continued bias toward tightening {that's a weird one, but wouldn't surprise me one bit!!] 5. 1/4 point decrease with move to neutral bias [That would be a full house for Bulls] 6. 1/4 point decrease with move toward loosening bias [That would like winning the Irish Sweepstakes for the Bulls] 7. All doubtful others from 1/2 point decrease to 1/4 point hike. [hardly an option] And that is what makes this FOMC meeting most interesting. There are many ways in which the FED may view the economy at this point and even more ways it may act to resolve the matter. And everyone is awaiting the action. Greenspan led on that he was wanting to loosen the choke hold some. . . but as you can see, there are many ways in which to accomplish that. No change this time around would be the wrong thing to do, IMO. The FED doesn't send a message by changing the bias [accompanying statement]. . . they send a message by raising and lowering the rates. They may even split the decision and raise just one or two of the 3 rates. Bulls want number 5. If I were to predict one . . . .as strange as it seems, I would go with number 4. I don't think the FED wants anyone to begin to get confident. Changing the bias changes the confidence level of consumers, investors and the like. Yet they know that they must act assertively in order not to further damage the economy and send us spiraling into a recession during 2001. I know it sounds odd. But that's my choice. So what else is new? Rande Is

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