Playing the FED into 10-31

P

pumpanddumper

I see a hell of a lot more red coming below 13,500 into next week.

The DOW chart is setting up like early August right now.

The FED will be perma longs ace in the hole again. If they cut this time a .25, I don't think it will cause a huge upswing. It's practically expected at this point. No cut and this will get ugly. This is just a gut feeling.

Any thoughts?
 
I think the FED is gonna have to take a stand... so people know that they aren't gonna just let the dollar become european toilet paper to bail out greedy hedgefunds...
 
interesting comment in a bloomberg piece on jim rogers and the yuan. the pound lost 80% of it's value over the course of losing reserve status. the buck could have a long way further to go
 
If Fed cuts it will be perceived as positive because a rate cut is positive, right?
If they don't cut it will be interpreted as the economy being so strong that there is no need for a cut. Housing etc all in the past.
 
Well at least it looks good to take a nice dump tomorrow:

11:37 p.m. EDT 10/23/07Futures/Extended Trading(Roll over for charts)
Last Chg Settle
DJ Industrials 13655 -52 13707
S&P 500 1518.60 -6.80 1525.40



All I know it's built into people's heads that if the market does "re-correct", the FED will be there to cut and bail out equities. Cry babies will be scream RATE CUT! Not a good sign to me and a sign of desperation. Once they come public with what they are doing is bad regarding the $$ and inflation, we can start a bear market. For now, just play the wild swings I guess. Good to see volatility back.


I think by next year, there will be emergency rate hikes to save the $$. But that could be at DOW 15k.

I just have a bad taste in my mouth right now.
 
Quote from mokwit:

If Fed cuts it will be perceived as positive because a rate cut is positive, right?
If they don't cut it will be interpreted as the economy being so strong that there is no need for a cut. Housing etc all in the past.
More...
I think the 2nd is correct. If the 2nd is correct then the 1st can't be correct. So I think a rate cut will actually benefit the bears.
 
Quote from MajorUrsa:

I think the 2nd is correct. If the 2nd is correct then the 1st can't be correct. So I think a rate cut will actually benefit the bears.
More...

That's what I thought last month. I figured if they cut 50 basis points, it would indicate that the economy was in really bad shape and the market would tank. Boy was I wrong.
 
Regardless of what you guys think, the ZQ (fed funds) Nov07 is at 94.495 right now. Basically if you sell here, you have .005 ($20 per contract, for 25bp move) risk for a $1000 per contract reward (if the fed doesn't move).

Personally, the fed needs to put the dollar first. Unless the primary plan is to move the dollar down further, they aren't going to cut here. Crisis is already stabilized compared to August.

Am in disbelief the market perceives the FOMC is going to cut just because Merrill had an extra 2.5B in writedowns.
 
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