Thursday, October 30, 2008
Fed cuts key interest rate to 1%
Yup, the US Feds have done it again. They have cut the key interest rate by 0.5% to the present 1%. It was 5.25 % not too long ago.
This could be the reason why the market rallied yesterday, and MAYBE for the next few days.
But from experience, usually after this minor rally, the stock markets will still continue to fall. As fundamentals in the economy has not changed yet. Like I said, it will take at least half a year for such rate cuts to be felt through the economy....so it means that the past few rate cuts have not been helping much ( signaling that a real problem is in the economy and has not been solved yet).
Trade with caution, do NOT be lured into this minor rally...but then again, the final decision is yours..personally i would think this would be a good time to start shorting ( but would need to look at the charts before deciding, been busy lately, so the charts have to wait..)
*Disclaimer : What ever appears on the blog is for your own reference only. It is not an investment/trading advice. It is always best to consult your personal financial adviser before parting with your money.