Bluepoint daily market view – February 19, 2010
Andrew Joseph Stack, 53, software engineer, small business owner, probably once a republican right winger, has been identified as the man who flew a small plane into an Austin building housing IRS offices yesterday. He appears to have posted a lengthy online rant attacking the Internal Revenue Service and declaring that, “I know I’m hardly the first one to decide I have had all I can stand.” Mr. Big Brother IRS man… take my pound of flesh and sleep well.” I took time to read his manifesto – a bit of a rambling rant, but it was clear he took too long to figure out in life that things are not fair and honest. He was under the belief that we are really practicing free market enterprise and hard work and innovation will yield good results. It does not … poor Joe …
So what does this event mean for us traders? We should understand that this market is heavily manipulated and we can only read the events of these manipulations to make money. What’s the latest manipulation? The Fed raising the discount rate by .25% in a so called surprise announcement (clearly they way this was release tells you it is suspect). The Fed discount rate is just a political game being played to show that the Fed has credibility. Markets sold off because people think that this a trend that starts. People are still under the belief that growth is around the corner. It is not. This system has too many Joe’s embedded into it and needs to be cleansed – there is no confidence in the system and a system that lacks confidence will fail.
Equities got a jolt on the Fed announcement and sold off but could actually turn this news into a positive. I am looking for it to rebound back to recent highs (1100ish) on the rebound short term reaction that, “yeah” the Fed is in control after all. Then a move down. Dollar obviously goes up further today and commodities trade sideways to down. Bonds trade sideways to up on a rebound from yesterday’s sell off.