Followup to: How to Be a Contrarian

On February 2oth we outlined the parameters of how to back into a contrarian position and posed the question of what would happen if the FED started leaking in some way that they have done enough on rates, that lower rates are not needed ?  I said then that I am watching for this and gingerly watching for technical signals to provide support.  Bonds are the leading edge in this scenario and todays decision by the FED to use LIQUIDITY rather than INTEREST RATES  to handle the real estate meltdown could be considered the signal.   That leading edge is kicking in today.

It was somewhat ironic that February 20th became kind of the center point for the start of the commodity upside blowoff which is nearing completion  as we speak.  Whether it be gold, corn, oil, etc, these markets will have some power removed as it is telegraphed that the FED is ending their rate reductions at the next meeting.  It also will be good for the dollar for some stability to come to short rates.