Daily US Market Comments 07 Aug 2006 by MastersoEquity.com
FUNDAMENTALS
Well, tomorrow's it! The big day where the fed can really make a difference. I suspect trading will be light today in preparation for the release. The "FED's Done" rally have been going on well so far and has made me wonder how much more has not been priced in so far. Will a rate pause really trigger a bigger rally or have the bulk of it been priced in already? Also, with some economic indicators still telling the story of a strong economy, will a rate pause now only lead to more rate hikes at the end of the year? My take is that the FED would probably need to hike rates at least for one final time tomorrow in order to seal in the effects so far so that it can be sustainable. Either way, however, I have my doubts as to how much more the market can go up from here without some form of profit taking or correction.
TECHNICALS
This is obviously a fundamental driven time and technicals will really be somewhat of a waste of time. From the looks of it, however, neither index are clearly safe from falling back into their respective channels and it won't be surprising to see a correction at this point.
Well, tomorrow's it! The big day where the fed can really make a difference. I suspect trading will be light today in preparation for the release. The "FED's Done" rally have been going on well so far and has made me wonder how much more has not been priced in so far. Will a rate pause really trigger a bigger rally or have the bulk of it been priced in already? Also, with some economic indicators still telling the story of a strong economy, will a rate pause now only lead to more rate hikes at the end of the year? My take is that the FED would probably need to hike rates at least for one final time tomorrow in order to seal in the effects so far so that it can be sustainable. Either way, however, I have my doubts as to how much more the market can go up from here without some form of profit taking or correction.
TECHNICALS
This is obviously a fundamental driven time and technicals will really be somewhat of a waste of time. From the looks of it, however, neither index are clearly safe from falling back into their respective channels and it won't be surprising to see a correction at this point.
posted by Jason Ng at 8:20 PM
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