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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (31886)	2/23/2001 11:21:01 PM
From: Dealer	Respond to of 65232

Posted by: dayniteshadow Date: 2/23/2001 7:29:18 PM (ET) Post # of 1410 Food from SI from SI board-similar theme from my prior post We are playing a poker game here in the market and with only 5 cards to be dealt, at least one of them is now a crash card and maybe more. The Pro's know this, and are still stuck with a ton of shares, as well as tons of clients who are getting scared and ready to dump. The rumor of the FED cut next week was started at a brokerage house. No doubt it was well planted as the markets today were well on track to a nice orderly decline that wasn't going to quit. Now the markets are very efficient in the way they work, and as we saw, a potential FED rate cut is now being factored in. What are the odds of this happening? Quite slim in my opinion. Consider this...the FED has no reason to reduce rates in an emergency session right now unless something severe happens that warrants it such as a market crash. The earliest news that could possibly stimulate a cut is the consumer report next Tuesday and again, I don't think the FED will be inclined to do anything unless the MARKET REACTION to the report is bad. If the report has bad numbers, that just stacks the deck for another cut at the next meeting...not inter-meeting. Remember...between meeting cuts are rare. So....now that the market has this "news", the prospect of a rate cut is being factored in, and may already mostly be in now. What happens, when there is no cut? We tank in disappointment. What happens when there is a cut? We pop and then drop because the "news" is already out and is being factored in...A rate cut won't be a surprise. Remember, what happened at the end of January? Everyone expected 50 bp, we got it, and the market tanked, because it was factored in. Remember the cut in early January? It was a complete surprise and thus resulted in a large spike in the markets because it was not factored in. Either way, the market is setting itself up again for a fall, and it will be a bigger one when we don't get the cut. Now also consider this...The FED is stuck. We have a falling market that can be propped up in two ways: either pump a huge amount of liquidity into the economy or cut rates drastically. Both will have negative effects on the dollar. At this point, the Money supply is already growing at record rates, and there are only so many rate points to cut before going to zero. Go ask the Japanese about that...Their rates were at 0% for a while and their economy is STILL stuck in a rut. Both liquidity pumping and heavy rate cutting will put a strain on the US dollar and given that the US dollar is the currency basis for a lot of countries around the world, Greeny will NOT save the markets if given a choice between the dollar and the markets. Also, in 2 months we have a full basis point worth of cuts and the markets are crapping out...lots of good that did. Bottom line is that the markets and the economy are in trouble!! Don't let those talking idiots at CNBC or from brokerage houses ( who defnitely do NOT have YOUR money as their best interest) tell you otherwise. This is NOT a bottom. Now on to those charts....today we had a nice hammer reversal form from a V bottom on the daily chart. Could this be a turnaround? Possibly, as the hammer is a very strong indicator. However, they do fail and hammers need confirmation. Check out this hammer on the Nasdaq weekly chart....they don't get any bigger and more pronounced than this. Huge failure to reverse. raptorgroupresearch.com And then look at these recent ones on the daily chart...both of the circled ones failed as well. raptorgroupresearch.com Until we break my critical levels, I am still bearish as hell.