Securities Research Services

Monday, March 03, 2008

Market Set To Get Ugly Unless Fed Disappoints Shorts Once Again

Unless the Fed steps in with another surprise rate cut, this is a market set to get real, real ugly this week. Short side risk has been reduced significantly by last week's failed breakout.


The rally attempt failed miserably and the bottom of this market is poised to fall out. We doubt the lower B-band can hold and January lows are in jeopardy of failing as well.

*Risk on the short side is low today and it is our recommended position. However, should the Fed plunge protection team steps in once again and lower rates to stop a disaster in the making, short positions will likely fail again. So, keep a close watch on the headlines today. Short, but be ready to cover quickly if the Fed lowers rates in an emergency rate cut.

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