What universe are you living in? Unemployment rate is at 5%, and if you add in those people who have stopped looking for work or have been looking for more then 6 months, that figure is more like 9.2%. Read your own post, it makes great sense that the Fed is going to cut rates when the economy is producing more then china and india combined, and theres a total of 11 people unemployed in the entire united states. Also we have discovered martians and they are adding their gdp to great economy of the united states.
Problem something similar to what happened the other night on ES except with more volatility and volume.
Overnight futures movement means little. Let's see what happens after 9:30 EST. Bottoms are usually marked by either (1) Wyckoff springs in which a breakout to new lows fails because of a lack of supply; or (2) a 1-2-3 bottom intraday (higher bottom, and then move above previous swing high. They often come between 11-1:30. Yes, I'm staying put for lunch tomorrow (and Monday, and Tuesday, until the inevitable) Bear market rallies are intense and tempting for the uninitiated, because they are so strong they can be mistaken for a long-term trend change. Panic buying begets more panic buying, merchandise gets marked up, smart money sells, and then the market crashes through support, because there really is nothing there. Except hope.
Except that one day when the upside reversal doesn't come. All the panicking shorts have covered, but the sell off keeps accelerating. I pray on that day I pray on that day I'll be able to see straight enough to flush my long positions.
Good thoughts. However, there have been years with a complete breakdown and 20%+ drop that weren't part of a multi-year bear market. 1987, 1990 and 1998 come to mind. We'll see...
I've heard sub-prime and related losses are much greater than the S&L/junk bond period in the late 80s. However, the GDP is certainly much larger now, as are the financial markets and global players. (In the late 80s, only Japan dared to step in and buy our junk, as far as I know.) I'd be curious to see how current problems stack up to vs. '87-90 when you consider the growth of US GDP and the global financial infrastructure.
Why does anyone care about rate cuts? The Fed started cutting rates towards the end of the summer and the market is lower than when they started because many people feel that the rate cuts are a part of the problem, not the solution.