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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (77034)	5/14/2001 9:04:58 PM
From: t2	Read Replies (1) \| Respond to of 99985

Just another example of traders expecting a selloff after the FED cut (see comment by Cramer below). This is precisely what I was commenting on. There are just too many that expect a selloff on the rate cut..which means they want to be short going into the announcement....and also meaning that they could be shorting in the past few days instead of covering as many suggest. What is the point of trying to catch a short tomorrow when you can do it these past days. That is also the reason why money managers or mutual funds may be waiting to take up long positions...wait for the expected drop to load up. Also believe Greenspan will look at this possibility (of a market drop) and try to word the statement in such a way that suggests the FED is not done cutting rates. He is aware that market levels are associated with consumer/business confidence and he can't take a chance with a so so policy statement that sends the Naz back to the lows. He won't want to take that chance. ------------- This comment by Cramer fits in with what people are thinking...and all seem to be thinking the same thing! Note the he still expects a selloff even with a 50bp cut; only a question of magnitude of the drop. That is a recipe for a big short covering possibility because so many will already be in short positions. Cramer's late comment tonite: 25 basis points 5/14/01 8:54 PM ET I like all of this 25 basis point chatter. Makes it more likely that the market doesn't sell off big on a 50 bp move.