Oversold Market with almost 98% bears with converted bulls to bears

IYC was sending recession warnings over one year ago, now, how deep it will be is the issue. As markets closed at supports, even though it has broken LT trendlines with very negative sentiment, we have a major turn date during the next week, ahead of the Fed meeting at the end of Jan, so, with AAPL/MSFT earning reports, let's muster up supports.


IYC charts:

http://investorshub.advfn.com/boards/replies.asp?msg=25254682



Converted Bears

Looks to be all mega bulls turned bearish now, including the public chart lists bulls. I commented on the two public chart list bulls during December as I see them screaming bull.

I just noticed that one of them has completely flipped to downside with the similar magnitude from upside.

http://investorshub.advfn.com/boards/read_msg.asp?message_id=26138291




Barking at wrong tree

Again, McHugh barking at wrong tree as it is Greenspan, bark at greenspan, Not Bernanke.

~~~

January 19, 2008

The Fed Fiddles While Stocks Burn and Crash
by Robert McHugh

http://www.safehaven.com/article-9264.htm








Bernanke dropping ball and lollygabbing: treat50 brought my attention to Walker's chart several weeks ago. As I was on the public chart list during Oct-Nov 2005 calling the bottom, I would know if Walker was around, but he is new to me.

Right around I was posting 12/12/07 bearish comment, Walker was screaming at bears that they were wrong during the last few years. He was so sure that market was going to blast off. Now, he was so wrong, he decided to blame Bernanke, but does not see recession. While his comments are interesting sometimes even though I don't read his posts often enough, his comments are entertaining. He has a potential to be a comedy writer.

If Marice wants markets to rally, he should kiss the ground of the Fed walked on as the big money sure has power to control markets. LOL





http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1926808

1/20 Commentary: In June of 2003, near the beginning of this bull market, short term interest rates were lowered all the way down to 1 percent. By June of 2006 the Fed had raised ST rates all the way back up to 5.25 percent and left them there until Sept. of 2007, when serious troubles became apparent to everyone concerning the housing recession and subprime mortgage fiasco. So in 2007 the FOMC lowered rates down to 4.25 percent. This occurred in 3 phases in 2007, with a 50 basis point cut on Sept. 18, a 25 basis point cut Oct. 31, and another 25 basis point cut December 11, bringing the current Federal Funds rate to 4.25 percent.

Now the Fed obviously left rates at the 5.25 percent for way to long, over a year, and we are now feeling the repercussions of that bad decision. Rates were left high for an extended amount of time, supposedly to fight inflation due to high energy prices. This error of driving rates too high, leaving them there too long, then cutting them too slowly is one of the mistakes that is compounding our current economic problems. If we do have a recession it will be the new Fed Chairman's fault, because he has misinterpreted high oil prices as inflationary, rather than choosing to ease monetary policy in favor of economic growth. The Consumers discretionary spending power is reduced because of high gasoline prices, while simultaneously interest rates were left too high for too long, resulting in no relief for the consumer.

Given the housing recession, the credit crisis, and our energy problems, not to mention that the economy is sluggish growing below trend, the Fed felt that they needed to have lowered rates by just 1 percent in 2007. Bernanke is out of touch with reality, by leaving rates at 5.25 % for so long and now lowering them back down at a snails pace. He could have spared the market a lot of pain had he simply lowered rates in a timely manner. Bernanke needs to become very aggressive and lower rates 75 basis points and continue to cut after that.

Bernanke has been a johnny-come-lately regarding interest rates because I believe he misinterpreted high energy prices as inflationary. Bernanke has dropped the ball, I have no idea why in the world, he is waiting around for January 30th to lower rates. We just got the core CPI data last week and found that core CPI came in at 2.4 % YOY for 2007, which is LOWER than the 2.6 % YOY core CPI of 2006. Higher energy prices act as a tax at the gas pump, which slows growth, but has not been inflationary. Because if it were we would have seen it spill over into core CPI, and core CPI would be a lot higher than 2.4 %.

Bernanke said last week during the Q&A, that he didn't think we would slip into a recession, and I agree with that scenario right now. But if he continues to drop the ball, lollygagging

around then there is no doubt that we will go into a recession due to the rookie Fed Chair's incompetence. When you have a rookie Fed Chair at the helm, you run rookie risks with the economy. This guy isn't the Maestro Allen Greenspan.