Shock and Awe

Shock and Awe, that was the street's response to the FED's action.  It is indeed a surprise to many people-- people in cnbc for sure. 

I was listening intently to my XM radio minutes before the annocement, CNBC had Rick Santolli on, while he was speaking, I heard from backgroup "Fed fund 50bpt and discount rate 50bps, I was taken back and immediately entered into my order for one financial stock and another order to a momentum player...  There  must be a lot of orders to come in and both orders took visibly longer to fill.   The second order was not exactly where I wish it should be, but at the end of the day, it does not matter.

All my lists are green, even the short list turns green, but it can be easily seen who is really strong, and who is really weak, that should be helpful going forward as well. 

Overall it was good, at least for the short term.

"Shock and Awe" was first used during the second Iraq war to describe the firepower of US troops.   I hope the results of this FED's action will be opposite to the result of the Iraq war.

Now, what about morning after?   I guess that is the question whenever one has a good time the night before...

First of all, the history is on bulls side.  There was an article on wall street Journal detailed the stock market returns after the FED begin cut interest rate,  almost 90% of the time, 3 month, 6month and 1 year's return was sufficiently positive.

Secondly, with financial was down so much, and short running high, even the short term looks very sunny.  so, let's hope today's momentum will carry us through the whole week.

Now, the attention undoubtly will turns to inflation, if the inflation remains cool, then, there are possibilities for FED cut more.   that makes tomorrow's CPI more important than ever, but if today's PPI is any indication, the core rate probably will be cool and that will bring the cheers of "godilock is back" to the street. 

However, the latest news has always been surprise, so, it is hard to say what will CPI be.  we just have to keep vigilent while the market is heading higher.