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iBooyah.com: August 15, 2006 - Is this rally for real?

Ever since the Fed decided to hold the federal funds rate at 5.25% last Tuesday, the stock market appears to be stabilizing.  We had a few days of sharp sell off followed by a few more days of rally.  However, on an average day, we did not see the same behavior we saw in May.  The fact the market now has a much clearer picture of inflation, interest rate directions and improving macroeconomic situation has helped. 

This morning, the PPI number had the investors stoked.  The below than expected inflation data suggest the FOMC is likely to keep interest rate at the current level for at least another month. If you are a trader and happened to be smart enough to have bought stocks in May, you are probably smiling today. Remember, taking some profit on days like today is not a bad idea.  As we have witnessed in the past months, today’s gain could easily be wipe out when the next economic reports is release.

 

 

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Posted by ibooyah on August 15, 2006 12:11 PM |

Comments

Keep up the great work on your blog. Best wishes WaltDe

Posted by: WaltDe | August 31, 2006 07:27 PM

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