Thread: Black Monday? and will the Fed cut rate on Tuesday?

Originally Posted by 350zCommTech

Thanks to Bear Sterns stupid panic statements and Jim Cramer's idiotic meltdown, the markets got torched as the Yen carry unwound like there was no tomorrow.

Come Sunday night/Monday morning, I expect Asia and europe to be down 2.5-3%. IMO, we might have a "black monday" especially if the YEN continues to rise.

The big question is will Bernake try to rescue the market with a rate cut on Tuesday? IMO, despite Cramers frantic call for the Fed to cut rates(to save his hedge fund buddies?), they will not do it. Doing so will kill the dollar and their credibility. How can they cut when GDP was at 3.4%, jobs at 92K, and headline inflation rising? Remember thier last FOMC statement? They stated that while core inflation was in their accepted range, they were now paying attention to other(headline?) inflation.

If they don't cut and their statement doesn't change much, it will be a big disappointment and the selling continues. Perhaps until we reach February's lows?

If they do cut, obviously the markets will shoot up big immediately, but the dollar will tank and it could cause more unwinding of the Yen carry trades. But the rate cut will be a big relief and I can see the dollar falling against all other currencies except the Yen, allowing the Yen carry trade to resume. Which could keep the rally going for days or weeks.

These are just my opinions and they're probably wrong, so please share your thoughts.

Monday morning is going to be a tough decision day.

Good Words, I agree. What comes to mind is ROCK AND A HARD PLACE! Need I say more?

Originally Posted by 350zCommTech

Thanks to Bear Sterns stupid panic statements and Jim Cramer's idiotic meltdown, the markets got torched as the Yen carry unwound like there was no tomorrow.

Great leadership by the CEO of BSC. I couldn't believe it when I heard him say things are worse now than during the tech bubble. Basically this guy's company put the whole entire farm on subprime lending and as a result, have absolutely crushed Bear as a powerhouse firm. Once again we're seeing how much greed is consumed in these hedge funds. This guy can go cry in a corner for all I care, he's a loser. He lost it all and wants everyone else to go down with it.

As for Cramer, I ...... No, I'm not going to go there. Jim's on our side, he knows CNBC is a bunch of cheerleaders.

Well for every winner there's a loser and I read in The Journal that some hedge fund is making a killing shorting these stocks. Apparently, the fund has been doing some heavy shorting the past 2 or 3 years as they saw the bubble grow in the housing sector. Returns were sub par up until the past 3 months where they've made superb returns. Sorry I can't remember the names of the funds.

I'd hate to see that dollar go any lower but unfortunately it's only going to get worse. If the fed cuts next meeting it's going lower. If we stay in Iraq, it's going lower. As Nut said, rock and a hard place.

Originally Posted by Bullitt

He lost it all and wants everyone else to go down with it.

Possibly, but what if things are really as bad as he said?

Originally Posted by 350zCommTech

If they do cut, obviously the markets will shoot up big immediately, but the dollar will tank and it could cause more unwinding of the Yen carry trades. But the rate cut will be a big relief and I can see the dollar falling against all other currencies except the Yen, allowing the Yen carry trade to resume. Which could keep the rally going for days or weeks.

I should add that they might also leave rates unchanged but their statement could be biased towards a future cut, which would probably have the same effect.

Looks too easy to say that the markets will tank. The money managers will be buying. They will be placing bets FED acts properly and helps out the economy.

What effect will the foot and Mouth outbreak in the UK have on International markets come Monday? Combine that, with the recent flooding, and increased security in the UK, one would think that the current downward trend would continue.

I don't know much about agriculture in stocks, would this new event cause an increase in some markets State side? Seems like a much larger economic tide, if it occurred, than a half of point on interest cuts. So they cut interest, who is going to borrow the money? Hopefully, credit isn’t as easily as obtainable as it has been, I know for sure all the “refinance your home” offers have all but stopped showing up in my mail box. Quick money might go for the lower rate, but increased production and shipping of beef and pork might help out some of the lagging areas in the States.

Just a afternoon thought while taking a break from working on motorcycles

I have now doubt that Monday will be bad overseas but I don't think they will scraping stock brokers off the pavement (actually I've heard they bounce like a dead cat)...I'm more inclined to believe that will be Tuesday and Wednesday.

The reason being, that the 200 dma seems to have a "suspension bridge" effect and I expect the usual pause befroe the Fed to minimize the buying and selling. The more the market pundits try to pump up the "Fed must cut" mantra, the harder it will fall when that doesn't happen. I completely concur with 350z's assessment of the Fed state of mind, but I see only a 1-2% loss on Monday - not enough to categorize it as a "black Monday". Even if the Fed cuts, I dont see anything more then a minor rebound.

I think the dip buyers are out there waiting, but now the pavlovian dinner bell response to every dip is broken. The whip of this market means that they will not come back en masse but trickle back in. I expect a reasonable stable bottom to form before we rebound. I'm almost willing to bet that the entire month of August is a lost cause at this point. I'm searching for a stable entry point.

Originally Posted by Griffin

I'm almost willing to bet that the entire month of August is a lost cause at this point. I'm searching for a stable entry point.

For those of us in the markets the question is whether or not to ride it out, or get out?

Anybody, Bueller, Bueller?

The answer is how is you risk v reward?
How long do you have to go before retirement?
If you get out now you will probably be selling low!......Not good! And how are you going to know when to get back in?
If you can hold the market will eventually come back up. When? Only the great Guru knows!
Sell when the market is overbought or stops are broken. Don't let small losses turn into big losses!
We've had almost a 8% decline in [SPX]. That will take almost a 9% gain to reclaim that territory.

Originally Posted by weatherweenie

For those of us in the markets the question is whether or not to ride it out, or get out?

Anybody, Bueller, Bueller?

I'm riding my Ducati and throwing spill to the wind. Spent some time today working up my next buy list - there are some excellent prices being offered for the long term perspective. A $16.02 price on the C fund is also golden. Take advantage while the opportunity is available - it will soon enough be back to $18.00. It was the ruin of many a poor boy, the House of the Rising Sun. I'll take a bite on the I fund at $23.00.

Where are you when I'm in Vegas?!

Originally Posted by Spaf

Don't let small losses turn into big losses!

That's the thing, I let the losses get away from me, thinking 'it'll come back'

I have a long time, over 10 years, until retirement. So, unless there's something REALLY REALLY bad, I'll just pucker up, and try not to let greed cost me in the future.

I was watching the Saturday morning Fox market shows and it was a mixed bag. Some said this is a great buying opportunity, others said this is just the start of the correction. We're not the only ones who don't know. Of course half will be right and the half wrong. Kind of like black and red on the roulette wheel.

Place your bets!