I am not talking about cutting a bit and seeing what happens. It is absolutely imperative that the Fed does not overdo it and then have to reverse course to raise rates. But nobody was talking about adjusting the economy. Everyone was talking about pulling the economy out of the subprime jaws of financial doom.
Let's assume that the boyz and girlz in DC really are as smart as they should be and they've been snickering behind the scenes knowing they've fooled all of us into underestimating them. That means in my book that they were trying to manage the economy with rate cut and the emergency 75 was just one more in the process. Today's then meant that the 75 didn't work and they were really protecting the public from itself, hiding the fact that we are in deep doo-doo.
In my column today, I posted a picture of the S&P 500 and how the past week of rally has been a corrective rally to a major resistance level. The Fed sparked the afternoon rally but it faded in the final hour to close the day down. That's a 250-Dow point sized decline in an hour.
And on the charts, it is also a breakout failure. Failure to hold a move in one direction is often a good sign to go the other way. In other words, the bulls could not hold it and the bears - like me - were just waiting for the market to come to them so they could sell at more favorable prices.
Don't get me wrong, the stock market can and will do whatever it wants and it could be kidding a kidder here. Nothing prevents Mom and Pop Main Street from coming into the market Thursday fresh off a good night's sleep with visions of helicopters circling their homes and protecting their economy.
Here's a gutsy bit of this post - I sold into the rally. Let's hope when I wake up in the morning I don't find visions of bulls stampeding.