Then the Fed announces a $200 billion dollar cash injection. I seriously doubt that last night all the central banks made phone calls to each other to set this up. But I have to wonder if there was a plan to put this into effect at a technically important point. It is without a doubt incredibly fortuitous timing on the Fed's part. Basically, the Fed just saved the market's bacon with today's move.
Anyway, here are the daily charts. Notice the Fed has saved the day for the markets.
The SPYs rose over their previous technical support on high volume. The high volume is a good sign as it shows increased interest in the market.
The QQQQs clawed their way over technical resistance established from their consolidation triangle.
Instead of crashing though support, the IWMs rallied back today.
12 comments:
So does this mean we can have our ineffective rate cuts reversed now please? Inflation is bad enough with one major factor driving it; now we have low rates and an out-of-control printing press. If the printing press is the right tool for this crisis, please raise the interest rates back up to Dec. 31 levels at least. Working stiffs don't appreciate it when runaway inflation at the pump and at the grocery store cuts into their standard of living.
Yes, but working stiffs aren't where BushCo is at, y'dig, m'man?
so this is what an economy addicted to heroin looks like...
I think the rates will be kept low to allow the banks to recover their write-downs for some time, at least until the next scheduled fed meeting. Between now and then they should have some data to make that judgment, but I believe the same-day would be premature, or at least send a mixed signal to the market, and thus hamper a rally.
The question I have is, will this actually make a difference to real estate and the market generally in the long term? Will this not only stop the blood loss, but pave the way to some form of healing? (Such that I should buy now... or keep waiting?)
:)
So now we can all get out.........and let the whole thing crash. This solves nothing.
So they have sent their financial institutions $300 billion in absolutely minimal rate loans to put billions in profits on their books to prevent failures, ignoring what it is doing to the value of the dollar and the inflation rate.
How long will these Rube Goldberg contraptions hold together?
"CLEAR"
Zap!
"We've got a pulse!"
I think they are running out of bullets. Maybe they have to go back to giving out free toasters with every loan.
The rally started in Asia and was evident in European opening spikes. That argues in favor of the Fed choosing an opportune moment. It would be interesting to know if BoJ intervened in any way to get the rally going.
--Charles of MercuryRising
www.phoenixwoman.wordpress.com
"Notice the Fed has saved the day"
Of course, what everyone's wondering is "how about the week, month or year?"
Dow moved 417, but look at extremely low the volume was (I'm guessing Yahoo's volume numbes are pretty reliable.) Only 1/4 the volume from past days! What happened here?
http://finance.yahoo.com/q/hp?s=%5EDJI
Most of the stocks in my portfolio haven't seen the wild variations of the larger markets, but today it went wildly opposite: as HUM shares dropped hard on wellpoint's (WLP) profit warning.
I'm not sure how these health insurers relate to broader indicators, but i can't imagine rising medical costs and weak enrollment (WLP's excuses) are signs of anything good in terms of prices and employment.
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