This market won't capitulate with Ben waiting at the wings. We'll drip lower, have a buy program save the day once a week or so at the close, and keep dripping lower. The only catalyst is the intermeeting cut, and if that doesn't come, then the FOMC meeting on January 30. Earnings don't mean anything. It is just noise. All hopes ride on the Fed. And they are false hopes but they do keep the market afloat.
ben`s more like the headless horseman with his hands tied behind his back in the opening seen of Gladiator.
It is funny how so many hopes are riding on this intermeeting cut, I bet a large number of swing traders are long only because of that hope. This just tells me that if there is an intermeeting cut, the high will be put in within the first half hour after the cut and sell off all day.
I think the Fed is only half of it. The increasingly likely potential for a Bush stimulus package is also what is keeping panic at bay. If he doesn't come up with something by the state of the union I don't think Fed cuts alone will be enough to maintain current levels.
Massive cuts are already assumed and baked in. The Japan experience where interest rates were lowered and kept near one half percent didn't stave off a relentless 15 year recession. The real question is, how different is the financial structure of the U.S. and Japan now and then, and whether the U.S. consumer will respond to such stimuli at a time when they are running out of equity and ammo.