Bear Market/recession Confirmed By Fed

Quote from Toro KMA:

Bernanke argued in an academic paper that cutting rates in 1998 lead to the bubble of 2000. Thus, this is an unlikely scenario.
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I agree. Above reply came in response to poster who said we will see the bull market of a lifetime. We have seen it. It's over.

I'll add that the more the FED intervenes, the more confirmation that that this is a market on life support. These bids to revive it simply give shorts better set ups -- although I'm the first to admit that from here on in, shorting will be higher risk and lower reward than it was only weeks ago.
 
You guys are making no distinction between the discount rate and the overnight fed funds rate, just claiming that they "cut rates" to support the market.

That's the primary reason that they only cut the discount rate independently is to avoid that perception. Guess it didn't work on you boobs.
 
Quote from EMRGLOBAL:

Today's .50 basis point is a confirmation for me, that we are in a Recession and the the market is WEAK.

Targeting short side, waiting for a monday rally to short into.

Welcome to the BEAR,

Remember, 2001-2004, all those rate cuts and the market did what? SOLD.
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Bumping the original post because I'd like to see more replies this thread. Goodly number of veterans bothered to reply, which makes the thread more informative than most. Keep it up.

Kudos to Original Poster for one of the better threads.
 
Good point about the discount rate vs Fed funds rate. Discount rate is for distressed financial institutions and its use is an admission of distress.
 
I traded thru the pair of surprise rate cuts in Jan and Apr 2001. Both were bonafide fed-fund rate cuts, both ramped price action as one would expect. Both sold off within a day or two which led to considerably lower lows from there.

No idea which way the market goes from here. If it holds Thursday's close = Friday's low and keeps marching upward, I'll buy it.

But... if they take out Friday's lows and close below there Monday or Tuesday, we will probably see SPX 1300ish soon after.

Fed gave a half-hearted shot with its faux rate-cut on option expiry Friday, purposely meant to juice the stock market. That had nil to do with providing credit liquidity... it was timed to blow out maximum stock shorts and give people something to talk about over the weekend.

The next couple sessions ahead are pivotal. Hold Friday lows = sideways to higher. Break below Friday lows, especially on a closing basis and S&P 1300 or lower is next.
 
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