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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: John Pitera who wrote (85678)2/21/2001 5:03:08 PM
From: pater tenebrarum  Read Replies (1) of 86076
 
John, it was exactly 102,42 on August 12 1982. the Dow closed at 776,92 on the same day.

if the Fed does another surprise cut it is likely that short covering will ensue, especially as the Nasdaq is extremely oversold by some measures. i still expect it to be sold in the longer term though...just as the last two rate cuts were.

that said it seems rather unlikely that we will get such a surprise cut, unless the market really tanks very quickly back to the '98 lows. that would without doubt freeze the credit markets, which is what the Fed needs to see to panic. otherwise the latest inflation data seem rather forbidding, and the Fed risks to lose what stature it still has if it panics into cutting again without awaiting further evidence on that front.

the situation so far (rate cuts fail to revive stock market) is reminiscent of Japan in '90 and the US in 1930, the only two examples this century of a similar post bubble environment in which rate cuts became ineffective.
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