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Pastimes : Home on the range where the buffalo roam
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To: JRI who wrote (10514)2/20/2001 6:34:11 PM
From: Raymond Duray  Read Replies (1) of 13572
 
JRI,

Are you at all familiar with the FRB's Plunge Protection Team? This mythical, and most likely real IMO, group is in charge of stymieing fear driven elevator shaft trading in the market. For instance, it appears that they intervened the afternoon of 4/17/00 by placing huge amounts of liquidity into the index futures markets. Can you confirm this?

Reason I bring this up is that I don't think the Chairman is going to allow the NAZ to cross the tape below about 2150, just to pick a number out of a hat. Reason I'm using that figure is because of the psychological damage that will be done to the market should we cross 2000. Greenspan is well aware of the nervousness of the market and of the consumer. He can't afford to let the mood get any worse than what it is now. Not without risking a very severe recession similar to the '90-1 episode. And should he allow that, it will forever sully his reputation. Which is probably more important to him than a couple of million on the unemployment lines. So, I can't agree that we will see 1900. In the past, ever since 1998, I've always had a trigger point whenever the market was trading toward a bottom and the market always reversed about 10-15% above what I would have considered a "natural" bottom. So, now I simply have raised my target to accomodate what appears to be divine intervention in the flow of the market. Comments welcomed!

BTW, Put:Call = .70, VIX = 27.50 at the close. We aren't even close to panic levels.
Ciao
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