What A Day!

Wow. Say it again. Wow. That was something to watch wasn't it?

The markets were poised to plunge, PLUNGE, based on future numbers and the global sell off we had seen Monday and into Tuesday.

And then....Ben attacked.

Cutting rates by .75% and making it kinda sorta clear that we can expect another .25% cut next week.

Futures recovered, then thought about what this move meant, i.e. the market is heading down fast, and back the futures market plunged.

Blood was on the wires as all the major indices started the day with major downers. But then things started to change.

A rally (kinda) ensued. Bargain hunters started to lurk around. Financials led by BAC (a 95% decline in earnings reported today) and Wachovia (earnings down 98% reported today), consumer discretionary, and even home builders helped bring the market back.

The market is showing that it is still hopefully that Ben can make this alright.

I'm not drinking the juice. I have for too long. This was just a show. The Fed is trying to show the markets and the world that it will stand for growth and growth only. But, uh, rate cuts aren't really felt for another 6 months down the road.

It will all end up looking silly when this doesn't help. It will make mortgage rates better, indirectly of course, and will try to stimulate borrowing with businesses and individuals by getting better rates on cars, etc.

But rates were already good. Banks have tightened the reins and are buckling down and trying to return to more traditional, tried and true, risk assessment. The Fed is trying to make them remember the good times that have turned so sour.

It's not going to work. My opinion.


Anyway, adding my two short EFTs looked great in the morning and just mildly ok by close. I was a little disappointed. Fine, I am really disappointed as I think you are going to see a bounce in the next couple of days in the markets. That new Fed smell is all over everything. But I am standing firm.

But I won't be adding another short EFT to the mix. After thinking about it, two is more than enough to balance the risk of my portfolio overall. Another toe in the water could lead to falling in.

I'm going to keep the pick in my back pocket and just see how it goes over the next 2 or 3 weeks. Then we will have some time for the Fed wave to subside and then we can get a better picture of what the markets really want to do.