Indices: Pay Attention to the Trend to Understand the Market
01/28/08 - 01:28 PM EST
Mark Manning
Editor's note: This column was originally published on RealMoney on Jan. 25, 2008 at 4:52 p.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.
A lot has happened in the market this week [Jan. 22-25], so there's a lot of ground to cover, from fundamental
, economic, psychological and technical perspectives. But only one of these will give us a truly accurate idea of what's happening in the market right now. First, let's go over a few of the issues of the week, and then hone in on what the trend is, where it is headed and what it means for the major indices .
President Bush finally got his economic stimulus plan approved and the White House made an announcement on the details Thursday afternoon. The package will give most tax filers refunds of $600 to $1200, and more if they have children.
The rebate part of the plan will cost about $100 billion, along with a $50 billion package of business tax cuts. The business package will allow them to immediately write off 50% of purchases of plants and other capital equipment.
I do like the fact that the government is doing something to encourage spending on growth in capital equipment, but this package appears to be just a watered-down version of any real plan that can help our country in the long-term.
Cramer: How to Pick Stocks Now (Jan. 25) |
to lower interest rates along with this economic stimulus plan is nothing more than a Band-Aid that the government hopes will hold up the market into the presidential election. Eventually, the piper is going to get paid for the subprime problems that still remain and dangerous derivatives that still plague the market.
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