The Fed can print all they want but they cannot create real wealth. In the long term, who cares if the market keeps going up in nominal USD if things like gold is going up faster? The most you can do is trade these short rate cut rallies (assuming that it happens), but realize that the Fed only has 400bp of ammo left. At some point something is going to give unless the US increases productivity and/or reduces spending. I seriously hope that the Fed is not stupid enough to do what what Germany did in the 1930's. (I know that there is a difference between real inflation vs. the devaluation of the USD, but for most Americans the effect of both simply mean that the USD buys you a lot less)
You have no idea what you are talking about. Bernanke and the other Fed governors are so afraid of INFLATION that they have been doing everything BUT PERMANENTLY adding money into the system. Those sexy little "auctions" that they have been conducting for all of the commercial banks just a touch below the Discount Rate are REPOS that are temporary in nature. The FED is so far behind the curve in this current monetary environment that it isn't even funny. Just take a look at the members comprising the current Board of Governors . . . and tell me how many were on the Fed Board during the last recession. By and large, it's a very "green" bunch that doesn't have much real world experience with declining economic growth. That's why they are BEHIND the CURVE and it is worrying the hell out of Wall Street.
They did everything they could to postpone the carnage until the new year as to not affect bonuses for 2007. John
Come on now, that is guess work. Daily/Weekly/Monthly charts look bearish, recession or not, substantial retracement now looks almost inevitable.
No reason to buy anymore. Everyone knows the recession is here and besides how can retail suckers blow money on stocks when their houses are worth 30% less than a few months ago?
Tomorrow's a down day for sure. Lots of technical reasons for a rally today but the rally collapsed on a rumour. Not much conviction on the buyers' side. If prices get much lower though the downside risk will seem minimal. RIMM @ 88.00 will be just too tempting to pass up.
The Nasdaq is now down 14.64% from highs made on 10/31/07. For it to fall into a bear market, it needs to drop another 153 points from its current level of 2,440 to 2,287. Looking at our trusty desk calendar, based on the 162 point decline the index has had over the last 3 days, we could be there by Friday! Yesterday, we highlighted that even though the Nasdaq was down 7 days in a row, it didn't mean we were due for gains on day 8. Now that the index is down 8 days in a row, however, the chances for gains tomorrow are better. Historically, the index has averaged a gain of 9 bps (median of 0.40%) on day 9 after declining for 8 consecutive days. And it has gone up on day 9 each of the last 8 times this has happened for an average gain of 72 bps. Hopefully the carnage can at least be stalled for one day! http://bespokeinvest.typepad.com/bespoke/ That´s of course, only the STATISTICAL point of view...
$NDX 1730-2030 rangebound from here on out into Springtime is my best guess. Buy dip open. Whatever happens last hour is likely sloppy chop suey. Gung Hay Fat Choy!
If you're an intraday trader, does it really matter? Except of course that all of us who live in the US don't want to see anything too dramatic. I, and many others, have been saying for a long time that this was coming, but it surprises me to see it now. I was thinking more in terms of after the election. In any case, we will have to go, eventually, below 1350 in the S&P. We will need at least a 15-20% correction, and possibly even more, to "correct" for the excesses of the later Greenspan years and the worst real estate, building, mortgage-industry collapse of any of our lifetimes. If we do something to put off the inevitable, as we may, it will only be worse later. In the meantime hasn't the trading been really great lately? Seems like there is just intraday money lying around waiting to be picked up. Also, Lovely opportunities now for selective investors to pick up bank stocks on the cheap. I've been buying UCBH, with a very long time horizon in the investment accounts i manage. I also like BancorpSouth right now. They dropped to 21.50 today, my buy point. And they have very little exposure to subprime. Still however, mainly cash, because there is more pain to come. Don't know when of course.