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Once again, the point is missed. The oncoming rate hike
was well publicized. The point is the intentional surprise
the Fed used to release the news so as to maximize its leverage
against market participants, many of them professionals and
market liquidity providers, at the hour of the day most likely
to cause the most damage. The question is whether the Fed
is serving best its own purpose and that of a key component--
the market itself--by such exercise of power. I say it does not.
It has nothing to do with whether the action was due, or their
shift in bias was previously reported. Reality is precisely
the issue, and all of it should be taken into consideration, not
just those position players who responsibilities to their own
trades rest comfortably on the sidelines during the daily, minute
by minute actions of market makers, specialists, and short
term liquidity providers--all of whom you'd be lost without at
the moments you choose to leave the comfort of your sidelines.
Get a clue.
Scheier
Jimmy wrote:
> If I'm reading this email correctly I certainly hope you are
> not a discretionary trader or for that matter a system trader
> as you won't last long. You need to give up the complaints
> go study a bit.
>
> Think about it a little. Stocks are way off their highs why
> would you be surprised at a strong rally let alone the economic
> situation that would cause the fed to lower rates. Reality is
> very important in trading. Get a grip.
>
> Jimmy
>
> -----Original Message-----
> From: scheier [mailto:scheier@xxxxxxxxx]
> Sent: Wednesday, January 03, 2001 1:24 PM
> To: Mark Brown
> Cc: Omega Users List
> Subject: Re: the Fed
>
> That's nonsense. And surely you can't suggest that the
> clearly bullish non confirmation's of the Nasdaq's relative
> strength today to that of the other two indices is enough to
> predict today's action by the Fed. And as for that subject,
> there are as many current sentiment indicators suggesting
> far more bullishness that warrants a low to tell the discriminating
> position player to stay the course and be short, even into this
> rate hike --especially that of more call buying than put buying
> over the last few days. In any case, that's not how day trading
> works, nor does it reflect the necessity of market makers and
> specialists, even as they see a turn, to play their role and take
> the opposite positions during the day just to keep order flow
> going smoothly. That's the point here, not whether the arrogance
> of some individual trader on the Omega group likes to draw
> attention to his predictive ability as you seem to imply.
>
> The point here is not what the Fed can do, but the respect
> it shows market participants, especially professionals. Their
> action, much like your comments, smacks of arrogance and
> false superiority. The market players, whether they are
> corporate investors, pension managers, floor specialists or
> merely small time speculators deserve more respect than is
> show by the Fed whether it is cutting rates or lowering them
> in such surprise moves. It reflects the attitude--often unsuccessful--
> that the G7 attempts to take over international markets when
> it seeks to intercede free market forces with its central bank
> buying power and force the relationship between two countries
> to a place it wishes it were, instead of where the market says
> it might rightfully be. Let the Fed do it's business with respect
> and humility for its place in the greater scheme of things: as a
> servant to the free market, not a controller of it.
>
> Scheier
>
> Mark Brown wrote:
>
> > Hello scheier,
> >
> > what you don't understand is that the market told you what would
> > happen BEFORE IT HAPPENED you were just not listening..
> >
> > s> I'm very lucky to be able to say I wasn't short the emini
> > s> nasdaq when this Fed announcement came out, but that was
> > s> by pure luck, as I was short twice on the way down for
> > s> moderate profits in what I thought was a normal day. In my
> > s> opinion, there is no excuse for the Fed to treat the market
> > s> and its participants in different manner for potentially bullish
> > s> news as it does for bearish. The right way for the Fed to behave
> > s> for such dramatic reversals of policy is giving small hints. This
> > s> intentional surprise treats such participants like market makers,
> > s> floor speculators, and specialists--who by nature must take short
> > s> positions as part of their daily role-- as if they were second class.
> >
> > s> I have previously held Mr. Greenspan in fairly high regard, but
> > s> must reconsider my opinion. This is an example of the Fed
> > s> playing god. That's not its role. It's role is to tweak. It's
> manner
> > s> should be humble. In this action, it places itself above the private
> > s> sector as if the corporate world of equity ownership were subservient
> > s> to the Fed's control. This is the ultimate disrespect. Some have
> > s> said they thought Mr. Greenspan should have gone some months ago
> > s> because of his lagging actions to leading indicators of a lagging
> > s> economy. I say he was doing exactly what he should have been
> > s> doing at that time. Now I find myself on the opposite side of
> > s> their opinions again. As they love him for his actions today, I
> > s> despise him for the thoughtless and even arrogant way in which
> > s> he has superseded his role.
> >
> > s> Scheier
> >
> > --
> > Best regards,
> > Mark Brown mailto:markbrown@xxxxxxxxxxxxx
> > Y = Offset + Amplitude * sin(Frequency * X)
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