Market Summary

We hope you are in cash because its the only logical place to be right now. The markets look like they will test the support levels set on August 16, the day before the Fed first cut the discount rate but shorting anything in expectation of that is dangerous as we can't know when the Fed and/or Treasury and/or the PPT (Plunge Protection Team) will step in to stop the hemorrhage. Recall that on the 16th August the DJI was down around 400 points at midday but recovered to close flat as news of the pending discount rate cut leaked out. Those in the know made handsome profits but the shorts got squeezed to death.

The major indexes had dramatic losses this week with the NASDAQ losing 6.49% while the DJI gave up 4.06% and the S&P 500 3.71%. the NASDAQ is the only major index still above its 200 day moving average.

In this uncertain environment, technical analysis is of little help to us. The best we can do is sit on the sidelines and wait for the storm to abate. There will come a capitulation point at which a bottom will be reached and the markets will again turn upwards, but it is impossible to say when that will be.

When it happens, we will report it here.

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