[Running_Man]

I eagerly await investor votes on Bernake next week

A very interesting week will be on tap for the bank stocks next week. Never in decades has their been a time where the entire world will be wondering about investor reaction to the Federal Reserve's move as they will be in the coming week.

• If the Fed reduces rates by 1 percent down to 2 percent will a massive rally follow?
• I would never have believed the Fed would totally abandon the US dollar what effect will that rate cut have on foreign investor confidence in the US?
• What is the impact of the Bear Stearns buyout by the Fed?
• The entire spectrum of bank stocks is hovering around their 52 week lows. Will these prices hold and catapult the stocks up indicating a bottom is at hand?

Until evidence conclusively proves my original thesis from one year ago incorrect I am staying with my initial conclustion there is no reason to move into these stocks. The level of unwanted financial assets is just too high and Bernake is showing absolute panic in his actions in the financial markets, if they break decisively through to new 52 week lows the market will follow with an even bigger break down than has been seen in many many years.


But if Bernake has played all the right notes and a big rate cut soothes all the fears the market should really rally and be strong from here led by the banking stocks and surpass the high of last Wednesday. I am positioned for and fear the market break scenario, primarily but I do remain alert that Bernake may possibly sneak calm into the market and allay all fears. In any case I think next week will provide a difinitive answer and not be a week of meandering around the recent mean.

The suspense is terrible, I hope it will last.