FED cuts by 0.25 & 0.25

Federal Reserve cut the Fed funds rate by 0.25%. This brings the Fed Funds rate to 4.5%. Last month in September the Fed had cut this rate 0.5% bringing it from 5.25 % to 4.75 %. The discount rate was also cut by 0.25% followed by a 0.50% cut in September.

The critical takeaway was the statement that showed that further rate cuts were highly unlikely. This is the best response we can get from the FED at this stage. It will REALLY help contain the Dollar slide and at the same time keep the market in bullish mode.

The market reaction though looking positive on the surface is a bit suspect. I am still having all the old longs- AAPL, BIDU, VMW, AMZN, BOOM, STV etc. Yesterday I sold DRYS, FSLR and CROX. CROX is reporting earnings after the bell today. The shippers are showing the first signs of weakness since I tagged them as trendsetters back in Aug/Sep 2007. Sold FSLR since I was holding it from the 90s and I think it was a good time to take profit.

I will be waiting on the sidelines to pick some new good longs over the next few days.