Market Losses Faith In Fed Says Market Timer Frank Kollar
January 18, 2008 (FinancialWire) (By Frank Kollar)
The S&P 500 Index (SPX) has now declined 18.2% from its all time highs back in October, and 9.9% of this decline has occurred in 2008, in only 12 trading days.
The usual security of knowing the Fed stands ready to pump in reserves and lower rates does not appear to be supporting the markets this time.
Fed Chief Bernanke may have lost credibility, by moving too slowly over the past months, as ample evidence of a looming recession was growing. After last month’s Federal Reserve Open Market Committee meeting he gave no assurances to the markets that there would be continued easing ahead, as needed, even after calls asking for such assurances.
Now, finally, he is vocally promising a substantial response at the upcoming Fed meeting. Does this mean he missed the boat and is now behind the curve? Will aggressive rate cuts accomplish anything other than to raise inflationary pressures?
The jury is out, but the market’s verdict came in today with the Dow’s 307 point decline after Bernanke testified the economy needs help fast. Investors have lost faith.
Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
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