Monday, September 10, 2007

Surprise Rate Cut?

Sorry, it's been a while since my last post becaue I've been very busy. Today I just want to briefly talk about the markets. Of course they have been quite unsettled recently. Many indicators are saying buy, but others are still on sell signals.

The Federal Reserve could be the wildcard here. More and more people are expecting an interest rate cut after the September 18 meeting of the Federal Open Market Committee (FOMC). If they cut rates, the market will likely jump sharply. If they don't, the market will likely drop sharply.

My sources are generally expecting a cut. Possibly multiple cuts in the next few months.

But watch out for a potential surprise rate cut before the meeting. Last Friday's employment report makes this more likely, although of course not certain.

If you are playing the market on the short side, this could lose you a lot of money real fast. I'd be very careful of going short at this juncture.

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