steveosborne
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Before Thursday afternoon, January 20th, the Dow oscillated for several days between 10500 and 10600 with most transactions taking place at the beginning and at the end of the day. Bar charts showing volume througout the day displayed smooth concave curves indicating that volume was gradually decreasing in the morning and gradually picking up in the afternoon. But with a burst of activity, the Dow reached new lows Thursday afternoon when it went to down to 10460, shortly after 1:00 PM.
The sudden drop was reported to be triggered by technical trading, which was very likely since the market mood was morose lately. Because of a widespread fear that the Fed would feel forced to increase interest rates, the market was often reacting negatively to good news, especially when good news were about employment and income. The market was trapped into inconsistent behavior with a strong propensity to reject positive macroeconomic developements. But there could be an additional explanation.
Market coverage in the morning of that day reported that many participants were waiting for the end of the inauguration speech, and I wouldn't be surprised that the drop that shortly followed had to do with Mr. Bush's promise to spread democracy in every dark corner of the world and that many of those who had been waiting for his speech were not left indifferent.
Now, let's see what happens to the US dollar over the next few days.
The sudden drop was reported to be triggered by technical trading, which was very likely since the market mood was morose lately. Because of a widespread fear that the Fed would feel forced to increase interest rates, the market was often reacting negatively to good news, especially when good news were about employment and income. The market was trapped into inconsistent behavior with a strong propensity to reject positive macroeconomic developements. But there could be an additional explanation.
Market coverage in the morning of that day reported that many participants were waiting for the end of the inauguration speech, and I wouldn't be surprised that the drop that shortly followed had to do with Mr. Bush's promise to spread democracy in every dark corner of the world and that many of those who had been waiting for his speech were not left indifferent.
Now, let's see what happens to the US dollar over the next few days.
