My Time

Wednesday, September 19, 2007

Bernanke strike hard, DOW surge....Asian markets to follow!!!

Wow....the FED makes a bold less expected move. Looks like they want to jolt the credit market out of its crunch. The DOW surge 335pts....how big is 335pts? This is the biggest one day rise in 5 years. Bigger than the rise after Fed cut discount rate in mid-Aug. ...and that mid-Aug rise propelled our markets - STI rose 100+pts and marked an important reversal. My models show STI to rise by more than 150pts and HSI to surge up by 1200pts. Today will be a BIG BIG day. I tried in my last playbook to explain the recent selling is due to reduction in exposure not something fundamentally bad happening in our markets....and that investors shouldn't follow blindly or be overly concerned. Those who reduced their exposure will now want to come back in. My expectation is for the DOW to make a move of more than 5% after the Fed cuts. It already move half that amount yesterday alone. I expect the total size of the move for STI to be about 300+ pts including today's 150pts. This will propel us just above our historic high. To see 4000 by end of the year, watch the credit markets for answers, is credit easing in the commercial paper market? ... THE STI WILL SURGE...WE WILL SEE NEW HIGHS IN THE COMING DAYS!!!

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