When the Fed made their BIG announcement at 8:29 am last Tuesday - it rendered Tuesday rate-cut likely at 0.5. Well that lasted about a day and a half. Market participants are like junkies. When that didn't work (short-covering rally) odds jumped back to 0.75 and now if we don't get 1.0 watch for a sell-off. Even if we get .75-1.0 and a rally - it WILL be short-lived and further render the Fed ineffectual. Which they are and have been throughout ALL their participation. Once the markets reprice expected values, we will again be able to trade appropriately. For now who cares - just sit back and watch! pS
Yawn. . . Already "short" - bought QID (57 strike) April call options Friday. ...after profiting ~15% in one account from Mar 54 QID calls from Wed-Fri. Right now short some ES as well. Positions hedged and using stop losses, but expecting the trend to progress as the next "shoe" drops. Either way, having cashed out 04-Jan-2008 - my powder keg is full for the next rally confirmation, which should be a hefty event to increase value of portfolio. "Don't fight the Fed" holds true, but they don't scare me. What scares me is PERMA-bull mentalities which just prolong the inevitable and waste my time. I'm gonna learn some new tricks from Pure-Tick so I can day-trade gains once in a while since this late-stage bull market melodrama is a real thorn in my side. pS I see why successful day-traders are mostly a healthy bunch - they avert all this whining and crying. G aka pS
Market will surge. Now call me an idiot too. Has the market surged in past 3-4 Fed rate cuts ? Just look at the charts and hang your head in shame for making these uncalled for remarks
Frank Grimes, Try shorting SPX when the Fed rate cut is announced. You will be in pure ecstasy and dripping with joyous emotions.
1/Paulson has already submitted his plans for the welfare of the fiancial markets..read my other post US controls markets.. 2/ SPX is at 1270 and it failed to breach that wall and the market just needs a catalyst or an excuse to revert back to higher grounds. 3/After Fed rate cuts immediately there will be a short lived down fall and SPX will seem to go lower for a short time. 4/But than it will reverse and roar back to its 28 day and 50 day moving averages and we will see from there where it goes. I will turn bullish if cross 1400 mark until than bears will be banging on the rallies. I hope the shorts go out in droves and put positions on and we get another massive short covering rally at the same time.
Fed cut of 1 or 125... The only thing they will be concerned about in that meeting is restarting some kind of lending activity. Which means steepening the yield curve. And, oh by the way...THE FED FOLLOWS SHORT TERM RATE MOVEMENTS WHEN THEY ARE EXTREME... Just a heads up for all those still cuttin yer teeth: the rate markets are way bigger and more powerful than the fed. And the past three weeks have seen one of the sharpest drops in short term rates in decades. 2.25% down to 1.12%. The TSLF action does not relieve the fed's need to steepen the yield curve: It had to do the TSLF b/c banks werent willing to lend to brokers. So it made an instrument for lending to brokers directly. The TSLF does nothing to inspire bank lending activity. And the low inflation number will pressure the long end of the curve, which works against bank margin. Honestly, the 1.50 thought is not that crazy. But I would imagine they'll do 1.00, so they can keep a bullet or two in the chamber for an intermeeting move.
the poll says equal participants for +200 and -200, which is exactly what is going to happen. All in a matter of about 5 minutes. And we end up right where we began and then the drift begins. Poor Ben. g