Fed does the expected half point cut. I am a bit stunned at the buying frenzy. Couldn't pull the trigger on shorts. It is not a high percentage play for position traders to step into the swift running water. Bonds sold off. Gold rallied. Then news of ratings cuts at bond insurers seemed to be like a bell ringing and everyone wanted out all at once. This might be considered classic bear market rally type of action--short, sharp rallies with very narrow time windows to get out.
Old timers will remember the old adages: "Don't Fight the Fed," and "Don't fight the tape." The Fed's moves will make a real difference for those with good credit. The tape is another matter. With the recent volatility, would be shorters need to pick their spots carefully. With these wide swings the temptation is to over trade, instead of being selective.
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