AG has been providing life support to the equity markets for quite a while now. Given the performance of the US$ one can assume Easy Al's liquidity flow has reached the point of diminishing returns. Greenspan finds himself in a real catch 22 situation, of late. Injecting liquidity to aid equities weakens the dollar, which hurts stocks, and it all becomes very circular. Kind of lends new meaning to the old mantra, "Don't Fight the Fed!".
hi Zeev, furthur to your analyis, 'nature abhors a vacuum', where selling pressure is creating a metaphorical vacuum on the buy side which must react regardless of current sentiment. and vacuums always fill quite rapidly.
disclaimer: not a scientist, merely a retired intel techdude, wiser but not much richer.
Zeev: My wife has been extremely upset by the 3 yrs decline in her 401K and finally she decides today to place her new monthly contribution into moneny market instead of equity because she was told by me through reading your post that there will be another massacre in late Sept./early Oct. before year end rally. She said why risk her monthly contributions now!
By the way, I have just prepared a proposal to TIAA-CREF to curtail CEO/Board directors greed and excessive compensation and to count stock options as expenses. It is one of the shareholder revolt and I don't trust Washington at all!
<<once the outflows by disgruntled investors stop, the balance will shift to "demand for equities" and with all the sellers gone, a powerful move could arise.>>
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