Pre Market - August 17th 2007

The Asian markets fell overnight by large amounts. The Nikkei closed down -5.4%. The Hang Seng down -1.4%.


Feds have cut the discount window rate by 50 basis points

So the rumor of an emergency FOMC meeting turned out to be true. And that is why so many people that were short the financials yesterday started covering.

Before the announcement this morning the futures were down significantly in reaction to the events that happened in the Asian markets which were down large overnight.

Does this move by the Feds cure everything? No, but it is a start. Futures are reacting rather violently to this news so far. Futures have jumped but they are VERY volatile. Moving quickly up and down. The markets may stumble a bit but as this news is absorbed and we are likely to have a rally. Just beware that if there is a 'sell the news' as the rally takes place today don't be surprised. Still many people hedging that the economy will continue to decline and may be taking the profits on the pop.

Use the list I gave you last night if you want to take a ride on the enthusiasm of the market. But still use caution because there could be other surprises that will bite the market. And the Feds move may backfire somehow down the road. So we will take a ride on enthusiasm but we will keep our seat belts on.