If the market got what they wanted with a 75 bp cut by the Fed, why hasn't there been a stronger reaction? Futures initially rallied 40 points, but have fallen back again. There's two separate issues here:
1) Some traders are selling into strength because they had to make sales--some bought futures an hour ago, and have a nice profit--and in case you don't notice most active traders haven't seen a lot of profits recently.
2) The sell any rally mantra is still strong---that in a bear market you sell rallies, not buy on weakness.
Good news about cutting at 8 am is that Europe is open and can react to it.
What's next? Here's what traders want:
--ECB following with cuts of their own.
--A larger stimulus package from Pres. Bush, Reid & Pelosi.
--Another 50 bp cut at regular Fed meeting.
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