With world markets now starting to crater and the futures WAY down even after an emergency 3/4 point rate cut, we’re in for a wild ride. This demonstrates that the world is finally at least taking a glance at reality. This WILL affect the real estate market. As people lose their jobs; the consumer finally throws in the towel; and inflation raises it’s ugly head - the rental market may improve and selling at retail may crater even further.
Once the Fed Funds rate is cut how long is it typically until the prime rate falls also? I have some properties under contract but I’m not sure if I should wait a few days, weeks, or whatever to secure the financing. Which if timed right could be 75 basis pts. lower.
You probably won’t see the interest rate on your mortgage fall the same amount as the fed cut the discount rate - which is a different rate than the PRIME Rate. The Fed is still scheduled to meet later this month, which they will probably cut PRIME then by .50 or so.
Rates are super low right now, and will probably stay that way for a little while. Watch the 10 yr Treasury note fluctuate, when that is down - rates will go down.
Today is one of the greatest days to be a trader… :biggrin
Read my post from yesterday,it played out exactly like I thought…It was beautiful because after the fed cut rates the market did a classic knee jerk downward…Market has been rallying straight from the open…I love when people play into the doom and gloom…
You can bet the fear is in the streets…Futures are currently down %4-%5 right now…Tomorrow’s open will be interesting…Unless Bernake lowers interest rates before the open…I wouldn’t be surprised and if does it will be the trade of the year…I will be long as much as I can buy for the day…But I honestly dont think Bernake lowers tomorrow…It’s too close to the fed meeting at the end January…It will look like he is throwing a life raft to the market again…He has to lower .75 or more to do anything…Would be interesting if he does it pre-market tomorrow…The rally would be insane…Short covering squeeze like no other…
Yes, I have to take my hat off for RookieNYC for his market prediction. However, there isn’t any market rally, or short squeeze … at all unless I misunderstood what he wrote (“The rally would be insane…Short covering squeeze like no other…”)
Tough crowd here…LOL…The day isnt over yet and I feel there is more upside but my money is made…I’m just watching for stops if we sell off…the trade was off the open…I predict we squeeze into the close…the shorts made their money and will look to cover before a rally…Let’s see…
oh and NDLM…The dow rallied 300+ points from its lows…I would constitute that as a very strong rally…fwiw
I have to agree with you. Market does have upside potential :biggrin. However, I don’t bet on the market today at all. As a matter of fact, I had safely relocated my assets into money market, and others a month ago.
People have been shorting for the past few weeks. So even if they have to cover at the end of today… I am sure they have already made tons of money.
Dow rallied 350 points off the low of the day…gain of %3
Nasdaq rallied 70 points from the low of the day gain of %3.1
S&P rallied 36 points from the low of the day gain of %3
I post to share with everyone,not to make myself look smart or stupid…Another reason why I post is to show the market doubters that this isn’t gambling or guessing…On a day like today any good not great,any good trader will know the odds are in favor of the market not selling much further after the fed cut this morning…But it takes huge nerve to put your money on the chopping block…That’s the difference…
The fact that stocks didn’t continue their plunge later today was a positive sign, however economists and analysts said a full recovery wasn’t likely in the near term, further rate cut is imminent (possibly another 50 basis point on Jan 30) in hoping for softer recession.
But then again, the REAL question is how many more rate cuts they can continue? Once they run out of the rate-cut ammunition, then what next?
I post to share with everyone,not to make myself look smart or stupid..Another reason why I post is to show the market doubters that this isn't gambling or guessing...On a day like today any *good* not great,any good trader will know the odds are in favor of the market not selling much further after the fed cut this morning...But it takes huge nerve to put your money on the chopping block...That's the difference..
Generally speaking…did you buy in more or less a half hour into the session…and then sell out later in the afternoon? And/or was this at least half of your strategy…with maybe shorting prior to opening bell?
NDLM hit it on the head. This is like driving a car and all you have to control it is the brakes. That works fine if the car is going too fast, but if it starts going too slow, then you can only let off the brakes so much and then you have no control at all.
Today after the fed cut rates I started to piece heavily into the SPY/QQQQ…After 4 different buy points I paired out as the rally progressed throughout the day…I kept very wide stops because I knew today would be volatile…But every time the market grinded higher I would sell off x amount…Before 4pm I was all out of QQQQ/SPY…My reasoning for using the index etf’s vs a stock is when you are a trader long enough you will be long a stock that doesn’t follow the market and it’s frustrating,so I use the index etf’s so I’m assured I track the market…Today was a hi % trading day…It was a gimme in the world of trading…Old saying in the market “you never go broke taking profit”…I’m happy but the markets volatile times is no way over…As for your other question no I was not short anything up until today simply because I knew the fed was lowering and I didn’t want to get in a squeeze…Hindsight is 20/20…In the end on a day when most accounts lost heavily even with the rally off the lows’, I went green heavily which is always nice…
Today after the fed cut rates I started to piece heavily into the SPY/QQQQ..After 4 different buy points I paired out as the rally progressed throughout the day...I kept very wide stops because I knew today would be volatile..But every time the market grinded higher I would sell off x amount..Before 4pm I was all out of QQQQ/SPY..My reasoning for using the index etf's vs a stock is when you are a trader long enough you will be long a stock that doesn't follow the market and it's frustrating,so I use the index etf's so I'm assured I track the market......Today was a hi % trading day..It was a gimme in the world of trading...Old saying in the market "you never go broke taking profit"...I'm happy but the markets volatile times is no way over..As for your other question no I was not short anything up until today simply because I knew the fed was lowering and I didn't want to get in a squeeze..Hindsight is 20/20...In the end on a day when most accounts lost heavily even with the rally off the lows', I went green heavily which is always nice...
I know in some of your previous posts you haven’t been the biggest fan of Kiyosaki…but your artful poker playing yesterday is well in line with the way he operates.
Moving money out to the center of the table…then retrieving it, (and it’s proceeds), as soon as possible.
On a longer term analysis…he likens the masses funding of their 401k’s and the like…to cattle being herded up for slaughter.
Take a look at any fairly successful mutual fund curve in 2007…many spiked upwards only to be trounced these past few months.
But the media financial gurus massage their audience:
“Now is a time to remain calm…the worst thing to do now is sell”