Intra-Day Update: Now We Wait
UPDATE 10:25am EDT: Nothing much to do but wait until about 2:00pm when we get the ‘word’ regarding the FOMC meeting. Obviously everyone expects a rate cut here – fundamentally it really wouldn’t change anything as the ‘effective fed funds rate’ has been below 1% for over a week now. But we need to keep up appearances, smoke and mirrors baby! Anyway, in the interim here are two reading assingments for you guys – you will be tested:
Clusterfuck (I like the sound of that one)
My favorite quote on that one:
[Millions of Joe-the-Plumber types] will be watching the official proceedings in the federal courtrooms with jaundiced eyes as they hunch in their tent cities, in the rain, sipping amateur-brand raisin wine bartered for a few snared rock doves.
This is Berk’s favorite quote from this one:
[The grizzly bear was wearing a “Dow 10,000” baseball cap when the index was still at 11,000. A large sign on the wall of Fleckenstein’s three-room office suite advises, “Protect Your Right to Arm Bears.’ ‘ ]
UPDATE 11:07am EDT: I forgot to mention – Gold futures reached equality this morning (c wave equal length of a wave) and I might just nibble on some GLD puts after the FOMC meeting. ZG/CG futures will have ceased trading by then but I think this is a pretty defensible position right here. Remember that it is extremely difficult to pick a good entry with Gold lately – it’s been extremely volatile and erratic. Sometimes it’s easy to get scared out of a position, so take nibbles and be prepared to lose a large part of your premium while you’re holding it. Trading Gold like equities doesn’t seem to work – you set a mental stop and it’s almost guaranteed to get hit, just to watch the metal take a tailspin a day later (or rally like mad if you were banking on the long side).
UPDATE 1:00pm EDT: Someone alerted me to an old resistance line in the NDX this morning – seems like it was breached just now:
UPDATE 2:44pm EDT: So, the mouth breathes got their coveted 0.5% fed funds rate cut. Life is fantastic now and all our economic problems are over – you heard it here first. BTW, may I point out that the 1.5% rate lasted for 21 days exactly – 3 weeks. The intervals between cuts are getting narrower. When are we cutting to 0.5%? A week from now after the election?
Anyway – not sure which way things are going to swing – my indicators are diverging again. I hate to sit here all week and not do anything but I don’t want to jump in unless I see a clear direction. Breaking the upper ranges and pushing through the lines I painted yesterday would give me more confidence.
UPDATE 3:54pm EDT: I just grabbed some GOOG puts.