Federal Chief Cuts Discount Rate

We saw how the markets rebounded late afternoon and then at night, announcement came from US that Fed had cut the discount rate by .5 basis point. Is it coincidence? Or did the privelleged ones closer to information managed to move in first? Why did DJ rebound off 12,500 and close at 12,800s on Thursday night? Smart money also know where they should move price so that the confidence of the market will not be rattled. Hence I do not trade the market using guess work, i form my own opinion and act accordingly. Making use of Technical Analysis, I remain objective in times of panic and will enable me to trade a non random market. Market doesn't move in a random way, there are clues to where it will move and we should all have a Trading System to crack the stock market code.

Source from http://www.federalreserve.gov, Ben Bernanke
In June 2006, Ben holds interest rate hike and that set us off on a wonderful rally for the rest of the year. Now 2007, Ben cuts discount rate and many in the industry are looking at it as a prelude to interest rate cut in September.

12 Aug 2007, wrote about my opinion. Right now market has moved in the direction of my anticipations that is, we are on course to a sustained rebound. If it happens, i will be turning long on index and get out of my stocks on the way up before the rebound ends and turn short. I believe a lower high would be seen. If market still cannot rebound, this is bad because if good news doesn't help the market, there will be no incentive for the market to move up in the near term. Right now, I shall stick by my view until the market proves otherwise.

DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.