Fed funds rate moving, fed buying stocks and Dollar has taken off.

Overnight, the Nikkei lost almost 500 points, reaching a 26 year low. But, as was the case on Friday, U.S. equity markets did not fall as sharply at today's open. We'll see a stream of economic reports this week and The Fed's FOMC is meeting Tuesday and Wednesday... their Policy Statement is scheduled for release at 11am on Wednesday. Most analysts expect a cut in the Fed Funds Rate of 50 basis points, but don't expect such a move to calm market volatility just yet.



It will take more time for the market to digest the impact of the government action we've seen this month, including the Troubled Asset Relief Program (TARP). The TARP was originally designed to buy troubled mortgage securities from financial institutions, but instead the first $250 billion is being invested (sunk) in bank preferred stock. Mr. Paulson determined that buying bank stock would be an easier and much faster way to get capital to them than trying to convince the banks to sell him their bad paper at pennies on the dollar. Now he's hoping the banks will use this capital to make loans to "Main Street". Time will tell if it was the right move. Looking pretty dismal so far as all the moves up are sold off by institutional investors. The Market Makers are showing their position.



Also, heads up on the dollar as we are about to hit some resistance on its raise to the top of the currency bucket. Also realize that the Yen is at a major resistance point on many currency fronts. Asia markets have lost half of their values this year. We are watching days where some markets are loosing 5% or more. This money is all flooding into dollars.

This international meeting will be a little rally hoax and expecting bigger declines.

Oil and gold will keep declining with this pressure.

S&P 500 day trading emini futures education coach Oct 27 sp500

S&P 500 day trading coach emini futures levels for October 27th.
855 is the point of control
837.25 is area for break down watch for volume pressure on approach.
819.75 is major support then 801-3. If we get to this level the sell off could reach capitulation levels. Looking for 8 million.

Greenspan - I was wrong but I was right Fed and Debt

In his prepared testimony to U.S. lawmakers, the former Fed chairman Alan Greenspan, called the credit crisis a "once-in-a century credit tsunami" that will result in a significant rise in unemployment. He further elaborated that the results have turned out to be much broader and more damaging than anything he had imagined, it was unexpected, a surprise. He was quick to point that economists are fortunate if their predictions are 60% accurate.
First, he poses the question, "what went wrong with global economic policies that had worked so effectively for decades?" Then he answers, "The breakdown has been apparent in the securitization of home mortgages."

Perhaps, this means that for the last 10 years the nation has been living in the 40% twilight zone, as I don’t recall any economists vocalizing eminent danger from the shaky mortgage products that Fannie and Freddie were dumping on the bond markets. We heard plenty about the "irrational exuberance" over rising home prices but a strange silence about the way they were being financed. How can a condition in the making of this magnitude slip under the radar of the nation’s brightest economic minds?

Now Greenspan points back, "In 2005, I raised concerns that the protracted period of underpricing of risk, if history was any guide, should have dire consequences…" If he means the underpricing of credit, he forgets that it was he who kept interest rates low, adding fuel to the financing frenzy…thus the housing boom.

The futures market is pricing in a rate cut of 50-75BP at their next FOMC meeting. That will lower the Fed discount rate to at the most 1.0%, leaving little room to move.
Now we have a problem, the credit crisis was allowed to fester and grow in a low interest rate environment and when the Fed wants to stimulate more lending and borrowing, they only have a 1.50% margin to work with. How can you lower rates below 0.0?

Mr. Greenspan is not the only public figure who is expressing surprise at extent of the credit collapse, and in the next breath has taken credit for forewarning its coming.

Warren Buffett's Advice: Be fearful when others are greedy, and be greedy when others are fearful.

This kind of makes me laugh because the Market Makers are setting this scenario for fast implementers in the market place.

Yes, most people are fearful, yes

S&P 500 Fearful - greedy the market and the investors

Warren Buffett's Advice: Be fearful when others are greedy, and be greedy when others are fearful.

This kind of makes me laugh because the Market Makers are setting this scenario for fast implementers in the market place.

Yes, most people are fearful, yes, there is opportunity.

Have you been convinced by the Pundits it is a bottom? Ready to just jump in so you won't miss it this time?

Well stay tuned, because you and everyone else are ready to jump in when their looks to be some sunshine. Now if this is the situation, when investors, who are the late implementers in the market place are sitting on the side lines with money in hand, who do you think will sell into this next demand surge?

The Market Makers and the Money Makers (TM) because they know that the pundits have set this as a bottom and there is more to go (to the downside).

Yes, if you are an intraday trader there is alot of money to be made but what if you are a hold and hope investor(HH)? Normally, you will wait til it seems safe, then you will stick your toe in, see it go up a little and as you think it is alright, the selling will start. You will probably be on a little vacation and not have your stops in because you haven't been taught this risk type management. The stock will surge and while you are on your trip you will think that this time you got it right. A 10-20% gain in a few weeks. You now decide to forget the news, enjoy your trip because you have earned it. Maybe it is time to reward your self, get a massage, go to the expensive restaurant.

Here is the Investors first mistake. They haven't bagged the profits. They think because they have seen the value go up that it is theirs. So, it is ok to charge a little more to the room or get another round of golf in, and maybe buy that gold anklet for your wife.

HH investor gets home, safe in the knowledge that he made that extra 20% in the market to turn on the TV. He notices that the Dow is now 400 points lower than when he bought the stock. A little worried he turns on his PC and goes on his online account to see that his stock is now 20% down from his purchase price. What to do?

One of the codes we have as Money Maker is that we enter the market with a stop and a target. We know when to get in and when to get out.

If you can apply these simple guidelines to your trading, investing and speculations you will always be able to mange your risk, bag your profits and have actually earned you vacation purchases.........

Just keep it in mind.....the profit is yours only after you have taken it.

S&P 500 limit down, futures market pre open

S&P 500 day trading emini futures education coach Oct 23