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To: SusieQ1065 who wrote (66610)	8/11/2002 10:13:35 AM
From: SusieQ1065	Read Replies (1) \| Respond to of 208838

Play Description~DIA puts Sunday, August 11, 2002 The DIA, which is the Dow tracking stock, has been on quite a run the last few days, as the market has made up its recent 700 point loss over the last four days. The euphoria that has taken hold of the market the last few days in anticipation of next week's FOMC meeting, seems overextended. If the Fed does not lower rates, look out for a significant pullback after the rally of the last three days, which may continue through Monday. There are several reasons the rate cut may not happen, the primary reasons being the upcoming anniversary of the September 11 attacks, and the already low Fed Funds rate of 1.75%. If Chairman Alan Greenspan and the FOMC lower rates on Tuesday, they will have already used up a significant bullet in their arsenal. The September 24 meeting seems a more likely target for lowering the rate. If there were to be any type of terrorist activity on or around September 11, the Fed would most likely step in and lower rates as they did last year, in an attempt to support the market. With an already low rate of 1.75%, which many analysts and large institutions are calling for to be lowered by 75 basis points by the end of the year, the FOMC must be careful when it uses up the possible rate cuts. By waiting until the end of September, they delay the effect of the cut by only six weeks, while still retaining the ability to state a "bias" toward lowering rates. This bias is generally used to let the investing public know what they will most likely be doing in the near future, without having to do so at the present time. If this were to occur, the market would most likely fade over the lack of lower rates that it has been anticipating. The alternative of a 25 basis point cut may also leave the market gasping for air. In the past, when the Fed has given the public what they expected, the novelty generally wears off rather quickly and the rally fades. If the rate is lowered by 50 basis points, as some institutions are predicting, then the rally will most likely continue, and our short play will be stopped out. It is unlikely that the Fed will do this, and leave themselves very little wiggle room for the rest of the year. A look at the PnF chart for the DIA shows a triple top buy signal at $88.00. However, it is right up against the triple bottom sell signal from July. This pattern, combined with extensive buying in the treasuries, may indicate there has been some short covering ahead of next week's announcement. We will use a trade below $87 as a short entry point. This would indicate the short covering has been completed and the market is ready to give back its gains, or the euphoria has worn off regarding the rate cut. In either case, a trade below this level could set the index rolling downhill. We will place our stop loss at $88.50, as a continued rally, 100 points higher than we currently stand in the Dow, could eventually end over 9000.

To: SusieQ1065 who wrote (66610)	8/11/2002 1:05:02 PM
From: DebtBomb	Respond to of 208838

""sell to whom?"" I noticed no one posted this top Yahoo story on this thread from yesterday, Hmmmm. Big Risk if Bear Market Ends with Bang NEW YORK (Reuters) - Be careful what you wish for. You may get it. A much-hyped "capitulation" or "selling climax" is widely expected to herald a stock-market recovery, but it could do just the opposite. "There is just too much stock in the hands of the public for this to occur," says Ray DeVoe, publisher of the DeVoe Letter. "There is over $4 trillion in stock mutual funds and the question about a V-shaped climax and recovery, if the public does decide to dump stocks, would run into the classic, 'sell to whom?"' biz.yahoo.com