Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

mainehiker...

Very short term, news such as the Iraqi's using chemical/bio weapons would bring in selling, but that would probably be met with increased fed buying and would change nothing other than a blip. Terrorism somewhere in the western world, especially if it were in the US might would bring in enough selling, but again I think even that would be met with increased buying to prevent a large selloff.

I think the only thing that will change things more permanently would be for enough institutions, hedge funds and mo-mo boys to decide that the Fed bandwagon was running out of the ability to drive the markets higher so they start to take profits. Once that starts, I think there would be a rush to the exits that could cause a very steep and swift decline. News that the war is effectively over could be the tripwire, since many folks are planning on selling the news, in my opinion. More earnings warnings and bad earnings reports (or the fear them) also could begin such a change, but it could well just come out of the blue the first time the Fed seems to be unable to raise prices any further - no way to know what the actual trigger will be.

The key for the Fed is to continually show that it has full control of the markets. Any sign of weakness or lack of resolve could unleash a beast that they are unable to tame.

mlsoft