MY UPPER HALF OF THE SUNDAY NEWSLETTER
JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED 18TH MARCH 2007
FOMC, A GENTLER KINDER FED?
Hello out there all my cyber trading friends from around the globe. On Friday and Sat we had an ice storm that paralyzed the whole city and shut down the airport for 10-15 hours again. never fool with Mother nature folks<G> I think that was the last gasp of winter and now onto spring with gusto since I saw a lot of red breasted robins flying around helter skelter, ahh yes spring is in the air.
Let me start out by saying that the markets have personally changed for me over this last year or so. The monumental speed of the movements in the markets and the indicators we all watch has move toward light speed. Let me remind you all of the May to June 2006 correction that lasted all of 4-6 weeks. From those lows we have rallied back up to new highs in many indexes for the last 8-9 months without a single "blip" in the radar. So now we get what I call "the trigger" Alan Greenspan mentions the R word(recession) and all hell breaks loose from overseas in the already nutso China Stock Market. Look folks not only do we have to contend with our own markets, but because we are connected to so many "other" markets we are now being jostled around like a toy poodle in a washing machine. Hey this is not funny if you ask me. Either we're being led by the nose or they're being led by us, in a continuing sea saw ping pong battle of who's got the "hot potato now" syndrome. It really has me laughing out loud because never before have I or you seen this type of action and reactions quite like this in the movements of the markets. And because of this willy nilly nuttiness the markets ebbs and flows have changed dramatically to kind of a skewed picture of chaos.
This madness, this chaos is hurting a lot of people out there, and because of the light speed of reactions inside the markets, the turmoil becomes exacerbated to 1000 times more difficult to ascertain what the hecks going on day to day. Now as you may or may not know that I am and always will be a raging bull. My glass is always half full. It's my nature to be bullish I guess because I'm a Taurus and just sort of happy go lucky type A personality. Some times it makes me error in my thinking because you can not be biased in these markets, having that thought process is a no no. But for all intents and purposes my market timing and basic calls have been spot on for a long time. No I'm not patting my self on the back, heck I truly don't need that, but what I am heading toward is this constant bearishness that's permeating thru the street crowd for the last few months that has me alerted to a major rally brewing somewhere down this rocky road.
Look I am a pure chartist as you all know. I love Point & Figure been doing it and using it successfully for 10 years now I know that cause they sent me a 10 year Anniversary card last year<G> Anyway the bullish percents I always yap about to you all are not looking very good right now and I should be feeling negative about the markets and telling you to be ultra careful with your longer term portfolio's. I have a sense about all this gobbledygook that started this much need overbought pullback last month as Greenie yelled "Fire" overseas that it seemed a bit orchestrated to me this time, and then the follow thru with all this mumbo jumbo about the "Yen carry trade", the problems with "prime loans", the housing debacle a real thing folks, and the basic trickle down effect of the collapse of house prices over the last 2 years or so. The effects on our lives have really had a nil effect if you ask me. Has it truly affected your way of life? I kinda doubt it and more over the speculative bubble in housing is only going to create some wonderful bottom fish buying opportunities in that sector as prices continue to fall at breakneck speed.
But so to are the markets after "bucking" that negative housing trend. They finally succumbed to this negative event, and then got a big boost from "outside sources" to further push the markets lower. All of a sudden fear has struck the fund managers like this is not good? right? It always comes a day late and a buck short for these guys who truly never outperform the markets ever! But now what with all this electronic high tech trading going on out there these days movements in time have been blown out of proportion the likes of which I have never seen before. Let me say that if this continues, if the economic picture deteriorates some more here over the next few months, or quarters, the FED will without a doubt cut rates to help what could turn out to be a major problem for the USA.
Now here's the premise I was as thinking about over this weekend here in good old Philly. At some point soon, and maybe right here at this meeting next week, they are going to "soften" their rhetoric from being hawkish to more of a "dovish" bent in the scheme of things. In fact what with the housing problems accelerating and not abating, because of this current potential of "more fall out" from this mess they are going to be ultra careful not to spook the markets in general. I can tell you all that this meeting and the next one will be critical to the whole direction of the next best trend, which I am calling up(higher) once we catch this local bottom. So stand back from any gambling here, no speculating just yet, and let's see what Ben B & Co. has in store for us traders out there. The markets have changed so much in their dynamics that late Thursday and late Friday it was like walking thru quicksand with galoshes on and weights on our ankles, it was that slow and stodgy. You can not and will not force trades folks it cannot and will not work. Stay extra cautious here till I see the all clear signal we are very close to it now. Many traders are looking for ridiculous numbers for the indexes(lower), but I am not. We shall see in the fullness of time what the final outcome will look like. This is an all important week for us. Stand Pat! The FED has a 2 day meeting ending Weds at precisely at 2:15 pm est. We'll be there with baited breath.
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