Posted by Blain 11 December 2007

Fed Decision Looming, Share Your Guess

Today is the big day, the Fed will be announcing another rate cut. The question is though, how big?

Most speculate it will be a quarter point, but from what we've seen earlier this year a half point cut cannot be ruled out completely.

What decision do you think is coming?

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Comments

  1. Posted by Andy on December 11, 2007 at 12:56 pm

    Yo Blain! Been a while...

    As for the Fed, there is a great quote that goes something like "don't spend your time trying to predict where the market is heading, rather make a plan to how you will react wherever the market goes." I definately butchered the quote but the meaning is still there.

    So hear is my plan (I'm bearish overall). If the Fed decision causes selling I am going to short the e-mini S&P Futures if it breaks the 50 day MA at around 1501. If it causes a rally I'll sit tight and see if it breaks to new highs in the upper 1500s. If it fails to break out I'll short the e-minis at that level.

    Both trades will have tight stops because of the leverage futures bring. I don't want to get whiped out haha.

  2. Posted by Bryan on December 11, 2007 at 1:56 pm

    25 basis point Fed rate cut, 50 bps at the discount window. Language should reflect further cuts probable. I think the numbers recently are too good to demand 50 basis points right now, but I don't think it's outside the realm of possibility.

  3. Posted by Bubs on December 11, 2007 at 2:00 pm

    My guess is that the markets close higher after the announcement. I don't think the 25 or 50 will make a big difference, the language will reflect further cuts down the road which will excite the bulls.

  4. Posted by Jorge on December 11, 2007 at 2:53 pm

    I'm disappointed in the 25/25. 25/50 would have been more acceptable I would think. No matter. SPY puts? :twisted:

  5. Posted by Andy on December 11, 2007 at 3:11 pm

    Officially short March e-mini S&P at 1508. Current price 1502'ish...

    Stop in place at 1523...

    Time to sit and wait

  6. Posted by Jorge on December 11, 2007 at 3:37 pm

    Under 1490 it seems. Nice trade. If I had the ability to do so I'd trade the e-mini S&P. I'll stick with the SPY for now (with much smaller gains :neutral: )

  7. Posted by Webomatica on December 11, 2007 at 5:15 pm

    Ouch! Looks like it was a quarter point as you predicted, but the market reaction was not good at all.

  8. Posted by Andy on December 11, 2007 at 6:21 pm

    Thats why you shouldn't try to guess what will happen and instead focus on the market's reaction to what actually happens.

  9. Posted by Andy on December 12, 2007 at 9:15 am

    Well so much for that trade. I got stopped out before I even showed up to work.

    How many more times is the Fed going to bail the market out???