when in danger, dialing FED

If there is one thing standing out for this FED, it is its willingness to acommodate the Wall Street and its penchant for surprise.   Remember the first action of the FED under Bernanke, it cut discount rate on an option expiration day.  And today, the FED is on it again, injected 200 Billion into the troubled mortgage business just a week before FED meeting.  But on the other hand, each of FED's action thus far seems only provide a temporary relieve and inflict the pain for the "short", it failed to gain any traction and save the market from going further down.  Will this time be any different?

For a trader, it maybe counter productive to speculate on the marco economy, plus, even the economists cannot agree as what is the status of economy right now, so, why waste time.   just let the price leads ...

The good news for the bull is that all major indexes are back above its support again in a strong fashion.  but it is too early to say that an upper trend is established.   actually, we need DOW to cross 12500 to say that it may reverse the trend.   Obviously, if the history provide any guide, we will have some up days leading to the FED decision and then the sell off.  at least, that is what happened last few times.

What about tomorrow?  Bespoke provide some insight, looks like odds is that the market may give back some gains of today. 




One thing I learned is that.  in this market, it is a danger to gamble as where the market headed next day, thus, long/short at the end of the day is not a good decision.  Also, in this jittery and news driven market, take the profit as soon as you can.   finally, be prepared both ways.

good luck