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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 687.57+0.7%Dec 10 4:00 PM EST
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To: Berney who wrote (77046)5/15/2001 11:29:02 AM
From: John  Read Replies (3) of 99985
 
You know, I try to keep CNBC muted most of the day.

I agree. I can't begin to imagine how the news of today's FOMC action will be received, but let me try for fun anyway. <G>

Scenario 1: The FOMC cuts rate by 50 BP's and equities rally. We learn the rally was caused by the rate cut because it wasn't fully priced into the market.

Scenario 2: The FOMC cuts rate by 50 BP's and equities sell off. We learn the sell off was caused by the fact that the rate cut was already priced into the market and people are merely selling on the news.

Scenario 3: The FOMC cuts rates by 25 BP's or not at all and equities rally. We learn the rally was caused by the excitement over strength in the economy. It is decided that the FOMC is finished cutting rates, signaling they MUST know something good about future conditions, and all is now well for U.S. equities.

Scenario 4: The FOMC cuts rates by 25 BP's or not at all and equities sell off. We learn the sell off was caused by widespread disappointment in the FOMC's decision.

THEN ---- We get Wednesday!!! <g>

Scenario 1 Tomorrow: The market sells off following Tuesday's gains, and we learn we had it ALL WRONG on Tuesday.

Scenario 2 Tomorrow: The market moves higher following Tuesday's sell off, and we learn we had it ALL WRONG on Tuesday.

Heh! Who knows? CNBS will have the fast answer for everything, as you know.

John
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