Is Helicopter Ben Naked? Read Tomorrow's News Today

Discussion in 'Trading' started by riskfreetrading, Apr 29, 2008.

  1. If the decision is no cut or a little cut, the market would go down.
    Here are the explanations you would read about tomorrow at end of day or few days later no matter what the fed does (as long as the market reacts by heading down immediately or few days later):

    1. 0.25 cut: the fed may know something that others do not know. Therefore there still is risk in financial system, and that is why the market heads down.

    2. No cut: this is not helpful to the economy/spending, therefore the market goes down.

    Therefore no matter what happens, is the market just hanging to deliver what it already knows it will deliver?

    Your views folks.

    Oh: the market will go down or up independent of what any explanation will be written. It has nothing to do with those explanation. It already knows what it will do. The writers like to find a reason for stupid joe to continue funding the market.
  2. You are being too narrow minded.

    The Fed is going to leave rates alone. The market will rally on the dollar gaining value and oil falling.
  3. Arnie


    I think the recent rally may be telling us the market already knows the easing is just about over. Market looking for 9-12 months of steady rates and stronger dollar.

    Edit: Mr Dodge beat me:D
  4. You are incredibly naive and obviously lack much historical market perspective.

    Mr. Dodge is correct.

    No cut will cause the dollar to surge, crude to tank, and stocks to rally. And for those of you that have been charting the FXE lately, you can already see the marketplace starting to anticipate this.
  5. Since the expectation is a 25 bp cut, we could see the market tank at 2:15 on the news tomorrow, since some traders are hoping for no cut. But then the statement will probably indicate that they are done cutting, so after the initial tank, the market will probably surge to new highs for the day.
  6. I don't usually trade equities but I built a small position in short S&P futures after hogs closed today in the pit.

    Look at it this way:

    No cut: Fed might be worrying to much about inflation. Market goes down.

    0.25 cut: Already baked in, market remains stable goes lower

    0.50 cut: Fed makes it clear that there are still problems.

    Of course, it depends on the language of the statement and I'll surely be in the S&P pit tomorrow to trade it. Seems all the overnight-holding locals are short the S&Ps into tomorrow.
  7. I hope you meant to say stocks to freefall instead of rally. A 25 basis point cut is already baked in. We are in overbought territory all on anticipation of a cut.
  8. S2007S


    I was thinking the same thing, no rate cut tomorrow and oil and the rest of the commodities could sell off. This could cause stocks to rally especially if oil sells off below 110 over the next few days. Funny how so many think commodities can keep on running without and kind of correction, I would not be surprised to see a 10-20% in commodities over the next few weeks, its obvious this was going to happen, Im holding SMN and have been trading it on and off for the past few weeks, sold 1/2 a position going into the meeting tomorrow because you just never know how irrational this market could be.....
  9. You could use a course in reading comprehension.

    I was clearly responding to option #2 by the poster that I was quoting. No cut = dollar surge = rally in equities ( just like Mr. Dodge stated ).
  10. Good analysis, from a professional. There is no upside potential in all cases. Therefore longs case is shaky.
    #10     Apr 29, 2008