Everybody Holding Their Breath

Posted by Mark Leibovit - VRTrader

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This Excerpt from Mark Leibovit’s VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE

Trading in stocks and other financial instruments was boring and range bound yesterday as traders waiting for this afternoon’s much anticipated Fed announcement. No US economic news yesterday also contributed to the slow sideways trading. The Dow was up 45.19 at 10,698.75, the S&P 500 was up 6.15 at 1127.79, and the Nasdaq Composite was up 17.22 at 2305.69. Volume was very light and breadth was positive.

But today should be different. First, China announces its latest CPI figure. Before the opening in the US, the government announces the productivity report for the second quarter. Then, this afternoon the FOMC is expected to announce new stimulus measures, while also expected to downgrade its economic outlook. All this on a Turnaround Tuesday. Not just any Turnaround Tuesday, but one that precedes a Weird Wollie Wednesday, which means we could have two days of extra volatility.

While all the above could cause extra volatility, the market indexes are continuing to test resistance. A number of indexes have already broken out to new 3-month highs, including the NYSE Composite, Dow Industrials, and Dow Transports, but just as many have failed to do so, including the S&P 500, NASDAQ, and Russell 2000. One small jump today could propel all the indexes to new highs and provide a boost for the bulls. But with everything dependant on the Fed now, the market can just as easily fall on today’s news.

The ‘Street’ and the world are holding their breadth to see what kind of rabbit Bernanke can pull out of his hat to save the U.S. economy from sinking further and to help allay further fears of a deflationary spiral. Is there anyway this is bullish? The ship is sinking and Bernanke throws us more of the same life rafts that didn’t work before. Ultimately, it comes down to lack of confidence. Bernanke can prime the pump all he wants and, yes, he can temporarily drive the markets higher, but at what cost? And, will he ultimately get the desired results?

Dow industrials

S&P 500

Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

Mark was named the #1 Gold Timer for the one-year period ending March 25, 2008 by TIMER DIGEST.

More kudos – Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!
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The VR Gold Letter is available to Platinum subscribers for only an additional $20 per month, while for Silver subscribers the price is only an additional $70.00 per month. Prices are going up very shortl, so act now! Separately, the VR Gold Letter retails for $1500 a year! The VR Gold Letter is published WEEKLY. It is 10 to 16 pages jam-packed with commentary and charts. Please call or email us right away. Tel: 928-282-1275. Email: mark.vrtrader@gmail.com