Watching the futures as we headed into today’s market session, I was contemplating to myself whether this would be like the Bear Stearns day back in March, where the Fed bailed out the company and subsequently the market rallied hard off of its lows. Well today there was a big difference, and that was the Fed was no longer willing to lend a helping hand and as a result, the market could never rally off of its early morning lows, and as we headed into the closing, the markets went lower…and lower…and lower.
Fed meets tomorrow, and if you haven’t yet red my article from last week on what we can expect from the Board, then read my article on the possibility of an interest rate cut. I believe we will get the cut from the Fed, and as a result, the markets will probably use it to bounce off its oversold conditions that it is currently in. However, if we don’t get the cut and if the Fed acts the least bit indifferent towards the market, then we will probably see another nasty sell-off.
Panic is in the air, people are speaking Great Depression II, Market Crash, etc. You name it they are talking about it. The best thing that you can do at this point is to not try and call market bottoms or market disasters, but instead read the charts, and let them tell you the story.
Don’t be surprised either, if the market does least probable action this week going forward, and puts in four straight positive days. Highly unlikely, but it’s just the kind of thing that the market likes to do…and that is to surprise you with the most unlikely alternative. We’re not saying it’s going to happen, but we are saying to try not to guess the market.
Also note, that the Fed’s FOMC Statement will be released at 2:15pm tomorrow and you can access it here on Shareplanner.
Here’s the Nasdaq and S&P charts…
