FOMC December 11, 2007 Meeting
The FOMC decided on Tuesday to cut both the Federal Funds Rate and the Discount Rate by a quarter point. The key in the decision was not the rate cuts but the statement still holding inflation as a key element to their decision. As a result, you saw the bottom from the markets come out, especially in the XLF (the Select Financial Sector Fund). Here are a couple of graphs showing you what happened intra-day. Note how the S&P has completely blown through support.
I may pick up on some SPY puts in the near term. I don’t expect the market to recover for at least a couple of days while they digest the FOMC statements. We may be retesting the lows we saw in August and November if the statement isn’t well received. Be careful. We may have a bear market on our hands.
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Watch for the 1464 support. No point buying puts before than. If break I think I am going to exit longs and short.
Anyhow food for thought?
later
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