Your Adarsh™

Letz mint some ‘ka-ching’

Fed takes the 911 call.

The tensions building up…traders/investors losing patience….heat building up throughout the trading sessions ….this was the theme in the market for the last few days. More and more killing news was making it to the wires. Some even screamed ON AIR asking the FED to cut rates. You know who  😉

But, the fed kept it’s cool. As everybody knows Fed doesn’t cut rates and increase inflation whenever you have an issue in the market. Is FED responsible for that?

The housing and the credit crunch were bound to make their way into the market, thanks to easy loans for the last three years. Fed has tried more than thrice last week to cool down the market by injecting cash into the system. But, that neither seemed to calm the bears, nor did it boost the sentiment of the bulls. Yesterday after a lot of panic selling in the market and a late huge up tick, THE FED rightly now cut the discount rates instead of cutting the fund rates. This should act as a coolant on fire and take the market to a sober situation.

But, people ask have we bottomed yet? Do we still need a fed rate cut? Is this short term issue going to throw us into a recession? Don’t we still need a rate cut? Should investors take profits on any rally and sit out till the FED cuts the fund rates? Time only can answer this !

But as of n0w I can tell you guys this ….

The discount rate fed cut, covers only loans that the Fed makes directly to banks. But the funds rate covers all loans that banks make to each other on a short-term basis. It is much more critical in determining interest rates in the economy.

It depends until when, but the market in my view is still in a bearish pattern medium term. Today, I’m sure most would say we have bottomed. But as recent as yesterday, some on the street were asking to take losses and get on the boat when it bottoms. I want you all to look into the medium term and long term unless you are a day trader.

The major issue here is …..What fed today did is no different
than what it has been doing for the last 2 weeks, but in a bigger
potential. Recollect what fed injections have done for the last
two weeks, one positive day and then a stretch of bear days. It’ll be
the same now…but may be we’ll be positive for more than a few
sessions…like may be a couple of weeks which will be kinda boosted
with the short covering.

Short term we are positive. But what about medium and long terms? What we are seeing today is not major buying, it is major short covering. I think we still have some more to go down. Hold on.

Hope that helps.

Please leave your comments.

Your Adarsh.

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August 17, 2007 - Posted by | Blogroll

8 Comments »

  1. […] Fed takes the 911 call. [image]The tensions building up…traders/investors losing patience….heat building up throughout the trading […] […]

    Pingback by Top Posts « WordPress.com | August 18, 2007 | Reply

  2. What do you guys think about TONS? I bought TONS at 45. Should I hold or sell? Can someone share their expertise? Appreciate your thoughts.

    Comment by Sashi | August 19, 2007 | Reply

  3. I would come not buy any commodities atleast for the next few days. Let the sectore bottom…n get in there….Moreover, if you insist on a pick…I’ld better go with X down 23% n three months, STLD down 23% in 3 months, or NUE down 27%…all three are good but they might go down a bit more. Good Luck

    Comment by youradu | August 20, 2007 | Reply

  4. Thanks Adarsh! I will get out of TONS…hopefully at 47 and think about NUE. Quick question..I am thinking about buying few GOOG when I see a bad day. What are your thoughts on that?

    Comment by Sashi | August 20, 2007 | Reply

  5. sashi….. 47 sounds a bit cheap….probably give it a 50 . 50 day Ma is at around 50.5
    But medium term technicals are pointing lower.

    Comment by youradu | August 20, 2007 | Reply

  6. no no no to GOOG we still did not cover our short position. We think we are going lower.

    Comment by youradu | August 20, 2007 | Reply

  7. Thanks again Adarsh. I will hold my thoughts on GOOG. I bought WIT at 16 now it is stuck between 13 and 14. I am getting to a point where I am going to take my loses. Should I sell it at 14 or is it worth waiting? Any ideas?

    Comment by Sashi | August 20, 2007 | Reply

  8. When did ya buy it? Did you buy for some event to happen or speculating some movement basing on some event?Was it a trade/investment? Has that event finished without the price movement you expected? If investment…probably should hold. The buy/sell depends on these factors.

    Comment by youradu | August 20, 2007 | Reply


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