junqi的博客
just personal musing
正文
What a day it was !
it was a forth up day for the market. if we had not consistantly been reminded of subprime write downs from major banks - in billions, we\'d thought we are back to the la-la land of year 2000.
The reasons for the uprise, according to news media, are because the rescue action by Singapore Government to UBS, and the good sale number from McDonald. But with a big decision from FED, it is hard to imagine that traders pushed the market higher without thinking of the interest rate. So, the only extrapolation is that many traders are become incresingly comfortable to a ever accomodating FED.
From a technical point of view, the market is in a really good shape. we are holding above 50 MA, which could become a new support.
But a surprise from FED could change all that.
The consense is that the FED will cut FED fund rate by 25 bps and discount rate by 50 bps. the former was to provide a life line to people who are in debt(whether it is a credit card, car lone or mortage)., the later is to provide liquidility to the debt market since the banks are still relectunte to lend each other, they can now borrow from the FED.
Even more important is the statement afterwards. If the FED signal that they will continue to be flexible, and the major risk is the economy slowdown not inflation, then, we can see the market racing even higher.
However, history shows that the trading after the FED was rather confused and volatile. Because like everything else, it could be read as glass half full or the glass half empty. Remember last rate cut, the market swung from loss to gain of hundred points in a matter of minutes.
The positive this time, it seems like bull become more assertive, today\'s action spoke loud and clear that they will push the market higher no what.
On the other hand, I am puzzled by the bond move, they are continueing to trending down. does it mean that the bond traders do not believe they will get no better deal anymore ?
Anyways, have a good sleep, and stay tuned to the annocement tomorrow, we may in for a battle.
it was a forth up day for the market. if we had not consistantly been reminded of subprime write downs from major banks - in billions, we\'d thought we are back to the la-la land of year 2000.
The reasons for the uprise, according to news media, are because the rescue action by Singapore Government to UBS, and the good sale number from McDonald. But with a big decision from FED, it is hard to imagine that traders pushed the market higher without thinking of the interest rate. So, the only extrapolation is that many traders are become incresingly comfortable to a ever accomodating FED.
From a technical point of view, the market is in a really good shape. we are holding above 50 MA, which could become a new support.
But a surprise from FED could change all that.
The consense is that the FED will cut FED fund rate by 25 bps and discount rate by 50 bps. the former was to provide a life line to people who are in debt(whether it is a credit card, car lone or mortage)., the later is to provide liquidility to the debt market since the banks are still relectunte to lend each other, they can now borrow from the FED.
Even more important is the statement afterwards. If the FED signal that they will continue to be flexible, and the major risk is the economy slowdown not inflation, then, we can see the market racing even higher.
However, history shows that the trading after the FED was rather confused and volatile. Because like everything else, it could be read as glass half full or the glass half empty. Remember last rate cut, the market swung from loss to gain of hundred points in a matter of minutes.
The positive this time, it seems like bull become more assertive, today\'s action spoke loud and clear that they will push the market higher no what.
On the other hand, I am puzzled by the bond move, they are continueing to trending down. does it mean that the bond traders do not believe they will get no better deal anymore ?
Anyways, have a good sleep, and stay tuned to the annocement tomorrow, we may in for a battle.
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