Fed to the rescue

All ears attuned to Chairman Ben, and he did not disappoint.  Since when have we  heard from Fed Chairman speak so directly,  not in an usually veiled, arcane Fedspeak, but in plain english:  "we will take "DECISIVE ACTION" to save the economy from recession.    DECISIVE?   if action means 25 bps cut, decisive action must mean 50 bps or more cut, precisely what Wall Street wanted to hear and market roared.

The good news is that FED and president/congress are working  stimulas to help the economy , although, it may be bad for the economy in the long run, in terms of trading,  it serves notice to the bears...

The bad news is that the economy is definitely in trouble, it may already in recession.  If that is indeed the case, next one/two quarters will be hard to be Bull no matter how much cut from FED, no matter how much tax cut Mr. Bush will propose--  all these measures will take time to be felt.

So, the market will be pulled by these two forces going forward, and big swing like past few days may become common places, so be prepared.

As for market racing higher, I am still having my reservations.    

In the last couple of days, the solar stock get hammered, and today agriculture, health care -- safe heaven of lately-- the sectors last standing in the face of onslaughter of Bear.   So, it is harder to find the leadership and it seems like Bear has broaden their attack on all sectors...

 Oil, gold and commodities may get a booast if dollar weaken again.

Health care might be another area to look for.  1).  even if there is a recession, normally health stock will hold up nicely.
2).  if the market goes higher, they will ride along.

china stock has been getting back to rise again.   yet LFC still remain relatively weak.  one of the concern was that LFC held a lot of investment in china, if china stock tanks, LFC will suffer more.  but now that, chinese stock market has come back, so will LFC..  hopefully.