Well here we are again, back at support levels for the 3rd time over the last year. It seems whenever we break support and the market screams sell, the fed steps in and up we go. Makes it difficult to trade any trends. Wonder where we would be without the rate cutting.
We could be heading to new highs if fed didn't cut rates to near zero 5 years ago which created an illiquid leveraged subprime market. Woulda coulda shoulda.... Who cares.. it is now what it is.
"Who cares.. it is now what it is." Well what is it? We've just broke support in major indexes after a double top that has failed. For most technical traders that's a pretty strong sell sign, except there is the spectre of the Fed breaking with the norm and jumping in at anytime with an unexpected rate cut. Maybe that doesn't effect the trading you do, but it sure effects mine, so I care.
Would the Fed ever do an emergency rate cut during market hours (9:30-4)? If not, then I'll stick to daytrading without holding overnight.
This is what the FED does when not reading reports. http://www.metacafe.com/watch/117939/italian_cork_soakers/
I can think off hand of three different times they've cut unannounced during RTH. Reardon Metal was down something like 2mil after they cut on 1/3/01. In both '98 and '01 the cuts led to instantaneous 50pt ES rallies.