John-re: CSCO news...interesting piece, but...
We shall see if the stock market discounts past or future news.
Per FOMC's statement, the Fed is determined to jump start the economy and renew consumer & business confidence.
federalreserve.gov
>>>Consumer and business confidence has eroded further, exacerbated by rising energy costs that continue to drain consumer purchasing power and press on business profit margins.
Partly as a consequence, retail sales and business spending on capital equipment have weakened appreciably.
In response, manufacturing production has been cut back sharply, with new technologies appearing to have accelerated the response of production and demand to potential excesses in the stock of inventories and capital equipment.
Taken together, and with inflation contained, these circumstances have called for a rapid and forceful response of monetary policy.<<<
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washingtonpost.com
>>>In addition, the language of the Fed's announcement indicated the central bank WILL continue to cut rates, perhaps even before the next scheduled policymaking session March 20, IF the economy shows signs of continuing to deteriorate.<<<
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Message 15256375
Elaine Garzarelli:
>>>Consumer spending will pick up, and the economy will show the signs by midyear. But the stock market will recognize it now," she said.<<<
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Message 15241402
Jeffrey Applegate, the chief investment strategist at Lehman Brothers:
>>>historically the S&P 500 has led the economy as an indicator by five months. So if Dec. 20 was the market "trough," a recovery should materialize sometime in May.
One-year returns after recessions have averaged 42%, while post-soft landing returns have averaged 31%.<<<
Ed Yardeni, Deutsche Bank Chief Strategist:
>>>Yardeni says this all means good things come spring.
"The first rate cut by the Fed during a monetary easing cycle is almost always bullish for stocks over the next 12 months," Yardeni says.
"There is no reason to believe that it will be different this time despite warnings by the usual end-of-world prognosticators that we have sinned and must pay for our excess of the past few years." <<<
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Message 15131589
Ed Yardeni:
>>>Fed always responds to financial crisis by easing, providing a LIFT for the economy and stock prices.<<<
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BRCM, a probable range of 105 - 125 till this month's expiry IMHO.
I posted elsewhere that the big boys executed 2 transactions concurrently on Tues, 1/30/01:
...4000 contracts of Feb105 puts, and
...4000 contracts of Feb125 calls
I surmised that the big boys sold/wrote these puts and calls for big premiums, and wanted BRCM to be within the range of 105 - 125 till this month's expiry.
Appears my guess has been correct thus far. If it holds true, all the credits to my options mentor, edamo, who has been unselfishly and unconditionally teaching/coaching me for the past 2 years.
If wrong, well, I've applied the theory and his lessons incorrectly. Can't always be right, ya know ;-)?
Good luck everyone.
di |
