Tuesday, June 25, 2002
Big Ooops in the overnight Futures...
Tuesday night: Futures tanked BIG on
WCOM $3.5B "fraud", sending the NDX (futures)to 978 (Oct98 "support" at 927) and the SPX to 952 as of this post.
The two indices are now in even closer price parity than before. At the futures values just stated, the NDX is now only 2.7% "higher" than the SPX. By comparison, at the peak in March 2000, the NDX was 209% higher, ie, twice the price. Wow. Things change.
As to where things are just now. These plunges, if they translate into the cash indices, move price right into the lower median lines, where no doubt there will be a buying frenzy at some point. Note how tomorrow is also the second day of the Fed meeting. Earlier today, One of the ex-Fed gov types was of the opinion that Greenspan would stay the course and NOT raise or lower rates. The strong plunge tonight will put even more tension into tomorrows announcement, regardless of its content.
As to the Small Caps, which have corrected a bit less vigorously, if this break holds, It will quite likely push the already tenuous "support" on the Small Caps lower. Again, creating a potential short lived rally moving into a wide trading range. All IMO.
One parting thought. I'd be wary of anticipating a "1987" type dead cat. If there is a "That's THE Bottom" type rally, it will IMO prove short lived.... but that's yet to come.
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
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