Telkonet Inc (fka TKO)

[WinOneGipper]

I posted this yesterday morning on another board... food for thought:

"Capitulation?

Well according to the Bollinger Bands for the NASDAQ, this should be the bottom. I'm not sure there is anything left to scare the investing public with... given housing, sub-prime lending, unemployment, oil, Iraq war, inflation, interest rates, and now China's questionable health and safety concerns. Looks like capitulation today on low volume. NASDAQ 2420 looks like support for the continuation of the current bull market. If we break below it to 2350, I think we'll recover into a right shoulder move up to around 2500 again by December, and then decline into a major recession for 2008 (Fodder for the election year.)"

On the surface, it looks like the bounce back into the close yesterday signals a correction and a resumption of the bull run... but not so fast. The fed discount rate cut today in the early AM may be too little too late. Discount rate cuts should have been done to spur the economy last Spring along with a Fed funds rate cut in May. However, the Fed has been totally preoccupied with inflation. The Fed is still not convinced the economy is in trouble. (On a personal note, ALL of my business contacts have been complainting about economic conditions [sales declines] for at least six months. Also, I watched a Hong Kong analyst report late last night, and this US subprime loan problem is THE primary cause of the GLOBAL collapse as well... it's literally huge in it's impact, and changes the world's view of our economic stability and power. Future global investment in the US will undoubtedly begin to decline. That's really bad news for the future!!!!

BSD mentioned he didn't think this sell off was like 1987. I agree. Unfortunately, it's more like the prelude to the recession of 1990 when the NASDAQ suffered a 44% setback (470 to 325). The historical setting is almost identical as well (Gulf war and all). It's starting to look more and more unavoidable IMO. The Fed must cut the funds rate to 4-1/2 in three quick, successive cuts to lessen its economic impact. Congress must also look to stimulate the economy through reduced spending and tax cuts like the fixing the AMT. Check out this article for more insights: http://money.cnn.com/galleries/2007/moneymag/0708/gallery.how_youll_know.moneymag/index.html

Sorry to be pessimistic, but all views should be considered!

Gip