As has been the case these past weeks, the market overreacts, but the fundamentals have not changed and they are not as bad as the media and perma-bears make it sound. The problem is that no one really has a handle on the new Fed, because I think he does not have a handle on his own message. He is wishy-washy, reacting to perceptions that he is too dovish and worrying at times he has gone too hawkish, although the latter is quickly evaporating in this new macho mantra he is sporting. Mr Inflation Fighter could be very well be remembered as the new Fed that gave America its second recession in four years. I hope not, but history is not kind to the Feds when it comes to timing rate hikes. They usually fail and fail miserably.
The charts took some damage, but if we can overreact to the downside, we can also equalize to the upside rather quickly. QQQQ needs to regain 39.30 zone in order to avoid the type of excessive panic we experienced in May. SPX is right above the 200 day exponential moving average and folks, we cannot afford to get down in the 1250's zone a third time. We need a bounce tomorrow and I suspect we will get it.
The charts took some damage, but if we can overreact to the downside, we can also equalize to the upside rather quickly. QQQQ needs to regain 39.30 zone in order to avoid the type of excessive panic we experienced in May. SPX is right above the 200 day exponential moving average and folks, we cannot afford to get down in the 1250's zone a third time. We need a bounce tomorrow and I suspect we will get it.
This entry was posted
on Monday, June 05, 2006 at 8:08 PM.
