Wednesday, August 15, 2007

Stock Market Volatility


We wake up today and hear that the FED is doing "repo action" or something like that. I'm not an economist... I don't know what they're doing.

But take a look at the futures! You see that spike up? That's when CNBC reports that the FED "cancelled their repo action."

Everyone thinks, YAY! The FED doesn't see the need for more liquidity, everything must be "okay!"

Ah... but what about that spike down? That's 5 minutes later when CNBC says that the FED cancelled the "repo action" because of "technical difficulties" and that they'll be doing it, but just a little later.

Makes for an exciting morning.


newequity said...

boy what did I tell you last night. Buy TMA and let it ride punk. You have already missed a $2 run since the open.

Dinosaur Trader said...


You're a genius. When are you starting the blog?


mOOm said...

That's when the CPI came out.

Dinosaur Trader said...


Sorry for the confusion. I wasn't talking about the 8:30 movement... I was talking about the 20 point move in the futures from 9:30 to 9:50. I guess it wasn't really a "spike" it was more of a "movement."


dg.morris said...

I'm no economist either but I think a "repo action" is the opposite of providing liquidity. What the Fed is saying is that they over did it last week and are now removing some of the liquidity.