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Strategies & Market Trends : The Options Box -- Ignore unavailable to you. Want to Upgrade?

To: hobo who wrote (9720)	2/26/2001 7:34:31 PM
From: hobo	Respond to of 10876

A slightly different view of things... yet, see the comment at the end... Disappointment from expectations, is a key word. ------------------------------------------------------------ Monday, February 26, 2001 Prime Time With the third strong close in the third consecutive day, signs of accumulation evident again today; breadth was powerful Monday. It is also significant that the market managed to stabilize at the area of key support on Friday. Friday's action was pivotal, in fact. As the market threatened to break support, concern here grew that the selling might accelerate. Instead, the comeback, and then exhibited follow-through strength Monday. This reinforces our opinion that investors should be long here. Interest rates are serving as the primary catalyst here. You have heard and you will hear more noise regarding the coming interest rate cuts, so let's cut right to the chase: April fed fund futures are now pricing in a 51 percent chance that we will see 75 basis points of cut(s) by the March FOMC meeting. 50 basis points by the March FOMC meeting is now assured, at least according to today's fed fund futures. It was announced today that Greenspan has changed his script for the 2nd half of his upcoming congressional (Humphrey Hawkins) testimony this Wednesday. This was the catalyst for the rally in the interest rate market and the discussion of an intra-meeting cut. July fed fund futures are currently pricing in an 80 percent chance of 100 basis points being cut in short-term rates by the June FOMC meeting. The bottom line is, rate cuts are bullish - an intra-meeting cut this week or next would be a very bullish event for stocks. The financial media is questioning whether the market is setting itself up for a disappointment (should we not get an intra-meeting cut) and questioning whether the market can muster much strength even if it gets the cut. The market looks primed. BUG@MarketBUG.com MarketBUG Member login: marketbug.com