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>Date: Sat, 17 Oct 1998 00:01:13 -0700
>From: mr_bond@xxxxxx
>To: omega-list@xxxxxxxxxx
>Subject: Re: FED cut forewarning
>Message-ID: <362840B9.5EE7B4D6@xxxxxx>
>Content-Type: text/plain; charset=us-ascii
>Content-Transfer-Encoding: 7bit
>
>What I don't get is why the fed would intentionally wreak havoc with the
>financial markets like that. I have a rule that I never have a trade on
>in front of an important Fed announcement, but there is just no way to
>prepare for that kind of carnage. Greenspan had to know that this would
>cause some serious margin calls, perhaps bankruptcies, for potentially
>50% of the traders with positions in the futures markets. I hope he has
>a clear concience about that.
I've never seen it pay to worry about the reasons why things happen. Nobody
know the Fed would move, but there was ample evidence that the market could
rally. The market predicts it's own future!
In the book "How to Make Money in Stocks" by William O'Neil, on page 59, it
describes how the market will "follow-through" to the upside after making a
low (if it's really going to go up that is). It's extremely specific,
easily computerized. As an added bonus, it really works. The real key is
the volume action. It works best on the Nasdaq. And it happened on 10/14,
the day before the blowout.
Any trader should know that the market can move suddenly and powerfully,
who cares why. People should expect the unexpected, and protect themselves
accordingly. If the shorts had some kind of protective stops on the books
they could have survived.
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