Surprise! Surprise! Surprise!

January 3, 2001
Kevin Marder

It was all there.

The biggest percentage gain ever for
the Naz.

The heaviest volume ever for the Naz.

The 100 up 18%.

Three-to-one Naz breadth.

In addition to the floundering utes,
about the only negative out there was the buy-the-rumor, sell-the-news reaction
in tens, as they gave back nearly all of Tuesday’s bulging gain.

Historically, we know that the first
cut leads to a series of cuts.

Historically, we know that the market,
on average, has shown solid gains three, six, and 12 months subsequent to the
first cut.

The last intermeeting cut was on Oct.
15, 1998…the Naz proceeded to bolt 46% over the ensuing three months.

And now for a dose of reality.

As the saying goes, “past
performance is not a guarantee of future results.”

In this vein, I would certainly not
abandon the principles that are the cornerstone of most successful
intermediate-term traders just because the Fed cut.

This means understanding that
Wednesday, more monstrous than ever for the Naz, is still just one day’s work.

This means understanding that waiting
for the right bases to form has, and always will, remain the low-risk modus
operandi for the medium-term speculator.

Certainly, it would be tough to sculpt
a session as beautiful as Wednesday’s.

It was all there.

In spades.

But for the medium-term operator — as
opposed to the long-term investor — the challenge now is to stay disciplined
enough to keep an eye on the tape, and not the headlines.

And that means sticking to the plan.

Surprise! Surprise! Surprise!

BUY THE FEAR, SELL THE GREED

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