I know the futures are down tonight, things could change by 9:30am, however I find it amusing how all the talking heads were calling a bottom on this market just last week, how long did this bear market last, 2 days???? Come on, if a bull market can rally on for 5 years why cant the bear market last as least 5 months. I do think the market heads further down, no way does this market bottom in a few days and begin to form a new bull market after most indexes around the world went bearish last week. The dow will most likely drop below 11750.....
The market has a bottom because the Fed cuts 50 or 75BP every time it sells off or approaches support. Where do you think we would be if the Fed was not doing that, where do you think we will be when the Fed can't do that anymore.
There are still credit worries and worries about more write downs, any more write downs and the markets could easily see new lows over the next 1-2 months. Most markets tonight are down 3-4%, Dow and S&P looking to open down 1%+ tomorrow.
IF the federal reserve didn't pump BILLIONS of dollars into this market in AUGUST 2007 and provide liquidity or cut rates like they have been the DOW would be sitting under 11k at this moment. The federal reserve should not have done anything Tuesday morning, doing that only created more problems. The best thing was to wait, if the dow starts to sell off again what will they do, cut more, you can only drive rates down so low before inflation risk starts to rise which it already has. The difference between rates now and where they were in 1987 is that the federal reserve doesn't have much room to drop rates like they did in 1987, where do they go after they drop rates down to historical lows and create more credit and liquidity problems. Cutting rates to historical lows in 2000-2001 is what created the problems this market is seeing today, cutting rates down again will only cause more problems going foward.
holy balls the S&P is tanking pretty hard for this shift. Good think I went long the two year note future.
Bastards got in the way of the BEAR Aug. 17th. They should have done nothing! Now the bear gets pay back and some more. That was supposed to be our Black Friday but no, they got cute and delayed the inevitable. So instead of getting a 15% in the index drop one day, it gets broken up. Fine with me. The games will continue, c'est la vie. Yes, we are slowly creating a new credit bubblw getting rates back to 1% or wherever they go. Sure, this shit will take "effect" down the road but there is still hell to pay. F the perma greedy bulls!