Well sometimes anyway. Then again sometimes the Fed tries to interfere with the markets. I would have to say the Fed is desperately trying to tinker with the markets lately. In Aug. we had the big correction. The market was trying to discount a coming recession. However if you notice the dollar line on the chart this is where the Fed decided to debase the currency and prevent the market from doing it's job of discounting future earnings. This is the point at which the dollar was allowed to break below historical support. This is the point at which the Fed decided to run the printing presses full speed ahead. So what was the outcome of all this money printing? The market popped back up to nominal new highs. Yeah! But wait a minute the market quickly rolled over into a bear market. Despite the all the Fed's efforts they have not been able to stop the recession from happening. All they have succeeded in doing is making it worse by adding a growing inflation problem to the mix. Remember all the PPT proponents out there who would cry wolf every time the market rallied? As I said then and I'll say now the larger trend of the market can't be controlled for any length of time. Just look at the above chart and you will see that despite titanic efforts by the central banks of the world the recession came anyway. Has the Fed learned anything? Apparently not since they are still doing the same thing, namely debasing the currency. Now some free money might be good for a few investment banks that are about to go under but it is not good for the US economy that has to live with a growing inflation problem. The bottom line is that as inflation rises margins get squeezed and consumers get pinched. None of that is good for future earnings. If earnings are going to be declining then I really don't see the rational for paying up for those decreased earnings. So while we may or may not be in store for a bounce in the market because sentiment got a little too stretched on the bearish side I still don't see any fundamental change that would make me a buyer of anything other than commodities (once the correction is over).