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Playing Chicken With the Fed

It's not enough to know what the Fed will do -- you also have to know the psychology of the market.
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This housing start number smells sweet to me, like the


work has been done for them and nothing needs to happen. It, plus the paltry statements from


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and the possible weakness in autos, begins to make a case against that miserable



So should we just go buy 'em at the opening? Should we just load up the boat?

What's the matter with taking a couple of pitches, leaving the bat on your shoulder, until after 2:15?

Remember, it is not enough to just know what the Fed will do. You have to know what the market wants and what the market will do if it doesn't get what it wants.

These numbers now make it less pernicious for the bond market if the Fed says and does nothing. It makes it possible for a bond rally to occur if the Fed announces a tougher bias.

However, these softer numbers, coupled with a tough statement, may reinforce the two-day-old trend to buy the


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and the


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. A tough statement may freak out those who are stumbling with cyclical issues, wondering where that rally went. Could the Fed be too vigilant and slow world growth just when it's getting good for the


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I do know this; tech's got some legs off this



number. That's where I want to be when the smoke clears. That, the Net, and of course, telco-tech (which is, after all, what all of these mergers in telephones are about). Nothing the Fed does will break the spirit of those who want into those shares.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long 30-year Treasury bonds. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at