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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
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Thursday, October 30, 2008

WackyWednesday

The Fed announced a 50 basis point (0.5%) rate cut for institution lending. This doesn't directly affect mortgages, that is typically tied to the LIBOR.
The market soared to a high of 9.347 but took a nose dive in last hour down 370 points or so to close at 8,976. In any event, the DJIA is starting to form a range, and I would like to see the DJIA break upwards 9,400 to confirm we are in rally mode for a while. See chart on the left.
As I go to bed, the DJIA futures are pointing to a higher open Thursday am.

The GDX (Gold Miner index) went from low on Friday of 15.80 to a high today of 21.31. Not too shabby, between 25 and 29% return depending where GDX was purchased Friday/Monday. Wouldn't surprised to see a pullback, unless GDX breaks down below 17, I am not concerned.

As for the US Dollar, it stumbled slightly today as it hit the bottom of a previous support level. It will be interesting to see if the dollar reverses or makes in into the trading range. (See chart on right).
if the Dollar/Euro breaks above 0.85, I'll be baffled on how the dollar became this strong.
The dollar will eventually get weaker by the reckless actions by the US Fed.
NEWS:
Fed to guarantee 3 million mortgages
Fed to open swap lines with emerging markets
Treasury gives Wells Fargo 25 billion in exchange for stock
Chrysler Financial Ford, GM have access to Fed TARP
Calls for regulation on Credit Default Swaps, as 3 Trillion dollar government expense on banking crisis is reached worldwide.

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