Securities Research Services

Wednesday, January 30, 2008

Don't Game The Fed

The market is currently discounting another rate cut today. There is no sense in trying to game the Fed. The market's oversold condition has slowly worked its way off and we suspect that if the market jumps on a rate cut that sellers will pounce on it the way they did Microsoft's good earnings report last week.

When the pullback turns the corner we will reload with new short positions. Meanwhile it's a good plan to just sit on our hands while others jump in and assume the risk involved in trying to trade the Fed today.

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