The Uncertainty Continues...

FUNDAMENTAL ANALYSIS
What was shaping up to a great day in the markets after an emergency meeting by the Feds and uncle Ben's promise to use all the weapon he has in his arsenal to help the market overcome the credit turmoil, ended up in split fashion after Richmond Fed President Lacker later said that the Fed will not change policies just because the stock market is volatile and that Fed policies should be governed by economics, not the stock market. Well, so much for his understanding of economics. How can anyone look at the stock market as independant from the overall economy??? What's more, cutting Fed Fund rate is NOT aimed at restoring the stock market! It is aimed at easing the mounting credit pressure in the mortgage sector! Well, times like that makes us miss old uncle Greenspan, don't we? Politicians should never be allowed to play with economics.

TECHNICAL ANALYSIS
The Dow traded sideways once again today, closing marginally lower by 30.49 points. Nothing significant should be concluded from the Dow's action today as it has ended in a typical, low volume sideways day, indicating a period of rest where investors preferred to sit on the sidelines. Such a couple of days of sideways trading following a big up day is also a typical behavior for the Dow's staircase like behavior or what I call the StairCase Formation. We should see the Dow forming another big up day within these 2 days as short term bullish momentum continues to build up. The only concern now is whether or not the Dow could break the 13500 resistance level later (which is still hard to tell now).


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