MARKET COMMENT
March 21, 2007
Smart money?
Or just money?
It’s an interesting thought but probably just
a waste of time to ponder.
I saw this article today here and I
thought maybe market insiders are going thru some clinical trial for this new
drug that helps you forget painful events from the past.
Sort of like the last three weeks.
Whatever problems existed recently [subprime mortgage contagion, recession, a Chinese inflation
crackdown, etc] have been overwhelmed by a wave of money.
What the Fed said today amounted to little.
I read their statement a few times and couldn’t
find anything that was significant other than a “clue” that talk of “additional
policy firming” [higher interest rates] was replaced by “future policy
adjustments”.
Investors with cash to
spend are a dangerous herd and they believe they found the magic words to start
a bullish stampede.
It would be misleading to say that volume was just average
since most of the volume came in the last two hours.
The theme today is “Money Talks” and a lot of it is still
being added to the primary dealers by both the Fed and the Treasury.
With expiring issues the total with just the
Fed is $29.5 billion outstanding.
The Treasury has been issuing short-term loans to the
primary dealers in addition to the Fed’s activities.
And, they’ve been doing so in heavy doses
that as of today exceed $33.5 billion.
If
they did nothing tomorrow [a big “if”] $5.5 billion will expire and on Friday
$17 billion will also expire.
Even if
that were the case the total of $63 billion between the Treasury and Fed seemed
to have greased the primary dealers well.
Mission
Accomplished?
[Yeah, I gotta admit to becoming more suspicious about all this.]
I’m not going to list all the sectors today since they all
did about the same thing.
More
importantly let’s focus on the sectors that were either forgotten today or
could make a difference down the road.
Money talks?
You bet.
Just a week or so ago all investors had one theme on their minds--avoid
risk.
Today as far as risk is concerned--game
on.
And we had a 90% day which means 90%
of volume was higher.
This is bullish.
We don’t want to spend time on conspiracies we can’t
prove.
Let’s just point out the money
injections and the results.
These past few weeks have been trying for all but the
nimblest day-trader.
That’s where trading
action has been most profitable.
For
typical trading systems there has been little success.
But tomorrow is another day.
Have a pleasant evening.
Disclaimer: Among other issues, the ETF Digest maintains positions in: UDN, FXY, GLD, DBP, DBE, IEF, EWJ and EWA.