Yes John, it's an amazing confluence of massive liquidity now meeting strong traditional buy indicators(cross over 200 DMA).
I had to chuckle this morning, when I did my daily check on Fed action:
biz.yahoo.com
Clean hands today,gggg.
I am thinking about the current 'perception', once again widely supported in the media, of a 3 to 6 month recovery, combined with significant technical buy signals on indexes, either here or close ahead. If one of the important objectives of the Fed was to put the liquidity to work to raise the market, thereby raising consumer confidence/spending, etc.; where do we go with interest rates bouncing hard here, post Argentina/Enron accommodation?
IOW: will the Fed try to save some 'bullets' and not lower next week, as most expect, and has been already factored into the bond market?
Other than this unlikely event, do you see any reason for the Fed to slow down the liquidity push?
Trying to read the economic trend tealeaves is impossible.
I have a hard time integrating some of the 'economic reports' like GDP, Unemployment, and even NAPM vs. Chicago PM, as well as the various consumer confidence numbers.
They all change radically from one month to the next, and get revised radically from one month/quarter to another.
I must agree with the basic 'don't fight the Fed' premise here; certainly it appears they are willing to do whatever to attempt to turn the economy, but my gut tells me their immediate objectives as regards the consumer are more doable as they are short term fixes for confidence/spending(e.g. mortgage rates, stock market 'recovery') as opposed to a fix for longer term problems like capex stall.
Sorry to ramble on.
Regards,
James |
