Markets to Fed: Please Save Us
Posted on January 31, 2008
Filed Under Market Speculator |
6:25amEST FOMC policy statement to be released, as traders position themselves for the announcement.
Once again we await helicopter Ben Bernanke to come and save the day. It is widely accepted that we’ll see another 50bps cut in the FOMC Target Rate. The market is expecting this, but it almost seems traders are not so confident they’ll get it. During the past few trading sessions: Monday and Tuesday we have not seen much accumulation in any of the major indexes. In addition we have last Friday’s bearish reversal, this points to a lack of confidence leading up to today’s announcement.
This past August the market staged a low on August 16th and we saw a low volume accumulation leading up to the August 29th follow-through day. May I remind you this was all leading up to the September FOMC Policy announcement that shot stocks higher by 2%. To avoid ” this time is different” we do have a slightly different situation where we are looking for a follow-through but yet to have one.
My game plan now is to watch for an opportunity to get a slightly larger position in TWM and SDD. At this point, I do not see how we can go much higher here. However, there may be some small opportunities to grab gains with some longs. I would certainly not bet the house on any longs at this point.
Its best to keep it small, cut losses fast, and be patient for great longs to set up.
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