massive fed rates cuts, supporting futures, bailout checks to every man, women, and child. We will not go down Tuesday due to the inherient manipulation of U.S. capital markets.
1. Rate cut Drives USD down further against JPY and other currencies => stock market goes down more as foreign investors will no longer buy USD based assets. I mentioned that last year. It is proven that from the last 2 rate cuts this is the case. 2. PPT Cannot support market when USD is goes down. The per minute amount of dollar burnt is much more than the Fed can print. Every time PPT pops the stock market, the USD has to be stable or bounded back up. Check out the charts to understand that. 3. Policy change like increase margin requirement Induces more selling because the public has been picking a bottom for the past 2 weeks with high leverage for a quick short term gain. VIX not going up confirmed that. So, are we going straight down? Not necessary. As I posted once, we will see a lot more limit down days. Once the cleansing process is done, stock market will form a base and come back. There is ample time for anyone to buy stocks then.