I do not think that the market will slide back "shortly" after a .5% rate cut, and an urgent one, but because it was so "urgent", by next Wednesday people are going to ask themselves was the manufacturer's report so bad, and if it was, what will be the impact on short term earnings, so I expect a peak by the middle of next week (I have 2850 on the Naz as a target), but the relapse should be mild, IMHO, like to the 2550/2600, then I expect the rally to resume during the week prior to the FOMC meeting, and I still expect a continuation of the current downtrend to strongly establish itself then (from 3050 a decline of about 700/800 naz point). That should form a strong double bottom from which a real rally could start again. At least that is the way I see it now.
By the way, Paul B. asked what is the rush? I think that the rush is in what is the not yet visible problems in Asia, too deep a decline in our growth rate could create a real catastrophe there. This time, the fed's rightfully, IMHO, decide to act before the problems become front page news. |
