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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 685.33

+1.1%

4:00 PM EST

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To: FrozenZ who wrote (77648)	5/30/2001 9:23:00 PM
From: t2	Read Replies (1) of 99985

When things go to far that way this secretive little gang will blow the shorts out of the water probably in a surprise days before options expiration or not. That is why it is too dangerous to be shorting near term unless one is daytrading. Even that can be dangerous if the market gets very close to Nasdaq 2000---an intermeeting cut could be coming then and the reason given will be technology spending...when everyone knows it is the market. It would spark a massive short covering rally since it would suprise the market. Greenspan's focus is the technology spending--the engine of productivity growth. He will do whatever is in his power to try to keep the Nasdaq from dipping to the lows. Remember they were considering an intermeeting move in April, just ahead of their regular meeting (based upon the minutes released...that is what I recall was reported)...all the while the "economists" seemed to have been predicting a slower pace of rate cuts. I believe it may have resulted from the Cisco profit warning around mid April. Cisco had painted a bad picture and that probably worried the FED too much. Only after seeing the market taking the warning in stride, they probably decided against the intermeeting cut. Greenspan knows the risks are too real to take any chances. He is listening to those that forecast a recession and not those that predict a second half recovery. AG does not want to take any chances. 50bps is almost a sure thing for this meeting (IMHO) even though FED funds indicate only 25bps. I bet he prefers to do this when the market is on a rebound. AG seems very concerned about the aftermaths of the technology bubble. (just speculation)

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