Wednesday, October 10, 2007
Record Highs Give Us Problems
The markets made new record highs Tuesday with Fed minutes cheering the bulls. The Dow ended the session with a gain of 120.80 points to close at 14,164.53. The SPX added 12.57 points to close at 1,565.15. We are still in the green but we are beginning to now feel a little uncomfortable. The speed at which the markets have recovered has been fast. I will move the stop loss to 1580.
The Fed minutes showed that the committee was unanimous when it decided to cut rates by 50-basis points. This is a positive as it shows that the Fed really felt this large of cut was necessary. This doesn’t mean that the committee will be ready to cut rates again in October, but does leave the door open. The Fed minutes also showed that future actions will depend on economic data.
The focus will turn to earnings the next few sessions, but the economy will be in the spotlight the last two days of the week. Traders will be looking to see how corporate America sees the state of the economy, but will also want to see how strong retail sales were in September.
The next few days will be key for this play. We really want to see some serious down movement....and soon.
Until next time.
The Fed minutes showed that the committee was unanimous when it decided to cut rates by 50-basis points. This is a positive as it shows that the Fed really felt this large of cut was necessary. This doesn’t mean that the committee will be ready to cut rates again in October, but does leave the door open. The Fed minutes also showed that future actions will depend on economic data.
The focus will turn to earnings the next few sessions, but the economy will be in the spotlight the last two days of the week. Traders will be looking to see how corporate America sees the state of the economy, but will also want to see how strong retail sales were in September.
The next few days will be key for this play. We really want to see some serious down movement....and soon.
Until next time.
# posted by Paul @ 1:47 AM 
