Saturday, March 15, 2008

Next FED meeting ahead.

Last week was again in token of volatility. One day record growth in 5 years and next day credit fear sell off. Standard and Poor´s reported expectation for total write-downs 285 bln USD and predicted soon end of credit market turmoil. Day after Bear Stearns bailout dragged markets again to red.

Coming week brings FED interest rate decision. What is broad market expectation? Based on futures the most probable (94%) is cut by 75 bp 2,25% on 18.3. Next meeting is scheduled for 30.4. and current expectations are 84% for 25 bp cut.

Previous cuts stopped broad markets from sharp fall. 16.8.2007 indices bottomed after FED lowered by 50 bp. 22.1.2008 againg bottom after sharp emergency cutting by 75 bp which followed by 50 bp week after during regular meeting. All cuts triggered rebound from strong technical support lines. Currently major indices are again on support
line. Here are resistance and support level for DJIA and S&P 500

DJIA: S1: 11 650 – 11 700
R1: 12 450
R2: 12 700 – 800
S&P: S1: 1 270
R1: 1 350 – 1 370
R2: 1 400

Related tickers: (BSC), (SPY), (DIA),


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