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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (32468)	3/18/2002 10:01:21 PM
From: Susan G	Read Replies (3) \| Respond to of 52237

Does anyone think that the BTK could be forming a big head and shoulders pattern on the daily if it stops again at 550 resistance? It's got a wedgie forming too. home.earthlink.net

To: Chris who wrote (32468)	3/19/2002 12:03:16 AM
From: Chris	Respond to of 52237

14:50 ET ****** FOMC : The Fed began its current easing cycle on Jan. 3, 2001, and all the while, it has maintained the view that the balance of risks in the economy were weighted mainly toward a condition of economic weakness. In laymen's terms, that means the Fed didn't think economic conditions looked so hot, and consequently, it remained inclined to lower rates again if necessary. For a multitude of reasons, not the least of which were the lack of business spending and the terrorist attacks of 9/11, the Fed felt it was necessary to lower the fed funds rate another ten times after the initial 50bp cut in January. Altogether, the fed funds rate has been lowered 475 basis points and currently stands at a 40-year low of 1.75%. Barring another exogenous shock like 9/11, it isn't likely that the fed funds rate will go any lower. In fact, the path of least resistance now is to the upside as recent economic data have pointed to an economy that is on the rebound. Even so, neither Briefing.com, nor the market for that matter, expects an increase in the fed funds rate tomorrow as the strength of the economic rebound remains in question given the continued sluggishness in capital spending and the uncertainty over whether the notable improvement in manufacturing activity of late is simply a function of inventory re-building after a prolonged period of inventory attrition or the start of a sustained pickup in end-demand. What we-- and the market-- do expect tomorrow is a policy statement that denotes a shift to a neutral directive and which readies the market for tightening down the road. With that in mind, here are some potential reaction scenarios following tomorrow's FOMC decision: (1) no move in rates and shifts to neutral directive--- nothing too dramatic since this is the scenario already expected by the market (2) no move in rates and maintains easing directive--- though a knee-jerk, negative reaction is possible as investors take that to mean the economy isn't out of the woods, Briefing.com thinks such an outcome should be construed as a bullish development as it would suggest a tightening is further down the road than many believe and (3) a tightening and a shift to a neutral directive-- first, this won't happen, but if it did, we would expect a negative response as investors fear the Fed is acting prematurely by raising rates at a time when it is still not clear if the recent signs of recovery can be sustained.-- Patrick J. O'Hare, Briefing.com

To: Chris who wrote (32468)	3/19/2002 12:04:41 AM
From: Chris	Respond to of 52237

14:50 ET ****** FOMC : The Fed began its current easing cycle on Jan. 3, 2001, and all the while, it has maintained the view that the balance of risks in the economy were weighted mainly toward a condition of economic weakness. In laymen's terms, that means the Fed didn't think economic conditions looked so hot, and consequently, it remained inclined to lower rates again if necessary. For a multitude of reasons, not the least of which were the lack of business spending and the terrorist attacks of 9/11, the Fed felt it was necessary to lower the fed funds rate another ten times after the initial 50bp cut in January. Altogether, the fed funds rate has been lowered 475 basis points and currently stands at a 40-year low of 1.75%. Barring another exogenous shock like 9/11, it isn't likely that the fed funds rate will go any lower. In fact, the path of least resistance now is to the upside as recent economic data have pointed to an economy that is on the rebound. Even so, neither Briefing.com, nor the market for that matter, expects an increase in the fed funds rate tomorrow as the strength of the economic rebound remains in question given the continued sluggishness in capital spending and the uncertainty over whether the notable improvement in manufacturing activity of late is simply a function of inventory re-building after a prolonged period of inventory attrition or the start of a sustained pickup in end-demand. What we-- and the market-- do expect tomorrow is a policy statement that denotes a shift to a neutral directive and which readies the market for tightening down the road. With that in mind, here are some potential reaction scenarios following tomorrow's FOMC decision: (1) no move in rates and shifts to neutral directive--- nothing too dramatic since this is the scenario already expected by the market (2) no move in rates and maintains easing directive--- though a knee-jerk, negative reaction is possible as investors take that to mean the economy isn't out of the woods, Briefing.com thinks such an outcome should be construed as a bullish development as it would suggest a tightening is further down the road than many believe and (3) a tightening and a shift to a neutral directive-- first, this won't happen, but if it did, we would expect a negative response as investors fear the Fed is acting prematurely by raising rates at a time when it is still not clear if the recent signs of recovery can be sustained.-- Patrick J. O'Hare, Briefing.com