The rate cut is already priced in at this moment, so the market will rise only when odds for a 50bp cut will improve. Meanwhile there might be a surprise cut in the discount rate. This also could give some boost to the market.
Maybe a week or 2 prior, but as you can see rate cuts wont help the market this time around, they bounce higher leading up to the announcement, but soon after sell off. Today the DOW dipped below 13k, wonder what it will do in 2008, im not surprised to see it drop below 12k in the 1st half of 2008. The markets put in a 5 year bull run, time for it to take a break, emerging markets are also looking tired.
50bp You want to see gold at 1000+ and oil at 120+......... keep wishing for more 50bp and watch what happens.
Take a look at fed futures. They are pricing 26% chance of a 50 bp cut. This is no bullshit, it is a real possibility considered by thr market right now. Yep, it really looks like fed madness, but ben will do whatever it can to stop a recession. Personally I don't think all the rate cuts in the world will prevent a significant correction in the stock markets, but may influence the timing. And you can be certain of gold 1000+ and oil 120+.
IMHO market is heading (INDU) to the 12500 level if not lower in Jan. Jan will be one of the most shocking pull back in history. Many will claim a bear is in, a crash is coming etc. Rate cuts will mean nothing but cheaper US paseo's opps, i mean dollars and more consumers go under. However, the reversal from this massive sell off will be very strong and could bring the INDU back above 13000. Looking to buy, but not till i see the target closer to 12500. not looking to short because it will not be easy play.