FED's about face

The FED knew immediately that its decision to cut 25bps was a mistake. however, being a central bank, a stately institution, it cannot simply say we are sorry we were wrong, let\'s forget the annocement we just made and let\'s start anew.

So, they used rumors and leaks to quiet their critics. The first thing you read from WSJ this morning was how FED is going to use creative ways to inject the funds into the financial market. plus, they could cut discount rate without FOMC meetings.

And people, at least some of them, are buying into the notion for a moment. obviously, there are even more people are waiting for this moment to dump their holdings. Thus, we are seeing a seasaw session.

So, what is next?

Technically speaking, we are hanging around 50 days MA, if we can hold, then, we are still have some hope. but for the time being, it is just that, a hope.

Fundamentally speaking, today\'s leak from FED is having a calming effect, if FED can follow its rhethoric with some actions -- for example, cut discount rate 25 bps (they should have done that yesterday anyways ) when the market has another big drop, maybe the confidence with FED can be restored.

Anyways, it is tough enviroment out there, cautions are needed.