The way that the market is playing out these days.

[moh malekpour]

The Fed Reserve is at the center of attention. At a blink of eye from the Fed, the market changes immediately. Just a small hint, a subtle impression from the Fed can change everything in the market.
If the Fed gives an impression on fighting against the inflation of which we are facing now such as high oil and food prices; the stock market will decline, the dollar value will increase, the T-Bill value will decline and its yield will increase, the oil price and gold prices will come down, the mortgage rate will increase and the housing market will decline further.
If the Fed gives and impression on fighting the recession of which we are facing now such as high unemployment and low activities in the housing and mortgage markets; the stock market will go up, the oil and gold prices will go up, the dollar will decline, The T-Bill value will increase and its yield will decrease, the mortgage rate will come down and housing market will decline further.
The Fed move on either way is going to be dangerous but to do nothing is not any better.

 

[Marcia Langley]

I'm certainly no market expert but it seems to me that once the market started its decline and became volatile about a year ago the level of volatility was exaggerated exponentially by the ability of large numbers of investors to quickly manuver for short term profit.

I envision hundreds of thousands of players sitting at their computers all day just waiting for a move in either direction and gambling on whether or not they could squeeze another nickel out of it.

The Fed's attempt to slow the decline just fed into that repeating cycle and the Fed became one of the "players." Now actions intended to stabilize backfire as catalysts to the volatility.

It is an extremely dangerous game.

I imagine there are lots of investors out there who missed the opportunity to just set out for a while have lost somuch money they have become more open to risk rather than more averse to risk.

Some investors with previously conservative positions paniced at their losses and threw caution to the wind trying to get some of that loss back.

I'm at a loss to see how anything anyone can do would have a long term stabilizing effect on the market. It looks to me like it's just going to have to play out to a hard bottom before it stabilizes.