Wednesday, October 10, 2007

Stocks Bound Higher on Rate Cut Hope

Stocks Advance After Fed Minutes Give Rate Cut Hope; Dow Sets New Records
NEW YORK (AP) -- Wall Street advanced sharply Tuesday as investors interpreted minutes from the Federal Reserve's last meeting as indicating the central bank is ready to keep cutting interest rates to boost the economy. The Dow Jones industrial average and Standard & Poor's 500 index reached new record highs.

"This adds fuel to the fire that the Fed is going to try and reinvigorate the economy with further cuts, and that's what they are committed to," said Richard E. Cripps, chief market strategist for Stifel Nicolaus. "The likelihood of having a second cut either this month or at the December meeting seems greater than before the minutes."

There is really only one word to describe yesterday's misguided euphoria in the stock markets following the Fed's gospel: BULLSHIT!

There is another word too: PATHETIC. If the only thing driving stock prices is the "HOPE" that the Fed will continue to cut interest rates, then we're all doomed.

I maintain my current consolidation bias in the metals, and predict a breath taking plunge in the stock markets within three weeks.

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