OK, I get it!

by Larry Levin


Today was another extremely volatile session. Fed chairman Ben Bernanke guaranteed that he "gets it" now, nearly promising to cut rates to whatever we demand. Are rates going as low as Easy-Al’s 1.0% housing bubble-blowing level? Perhaps, but only time will tell. Until today Mr. Bernanke had been fighting to be different, to be at the helm of his own FOMC. Alas, the chairman acquiesced to Wall Street’s demands to be a carbon copy of his predecessor: easy money all the time, now and forever – Amen.

It’s now a full court press to save the U.S. stock market…to keep it from going through what had been the normal business cycle of the not too distant past. The enormous sums of money that poured into our market from foreign nationals like Singapore , China , Saudi Arabia , and other countries were just the beginning. Next came an unlimited (that’s not an exaggeration) amount of liquidity from the European Central Bank. Around this time the FED also kicked in a few dozen billion dollars. Then the U.S. Treasury joined the game by changing the rules: it "fixed/froze" the interest rates of many outstanding loans.

Of course today was the "biggie". Mr. Bernanke said, OK, I get it! We'll just 'fix' (as in rig) the whole system. I'll slash rates until people stop saying bad things about me and just forget that whole free-market business cycle thing I used to teach at Princeton . Just leave me alone!

The reaction to his speech, however, was slightly unusual. The S&P's exploded (this part was expected) 19.00-handles…then FELL 22.00-handles (this was the unusual part). Is the market worried that a guaranteed 50-basis point cut this month isn't enough? Surely his speech insinuates he will work to cut rates far more than that. Not to worry though, the Bank of America takeover rumor of Countrywide Financial completed the expected rally. When this hit the tape, the S&P exploded 25.00-points. I’m glad we were expecting this (rally).

The rally to 1436.00, however, didn't stay there. On days like this I expect the market to trade new highs into the close. Another oddity was the subsequent 15.50-point fall from the high. Although the Bernanke news is good for a bull rally, it certainly isn’t acting "normal." Perhaps it will "act normal" (whatever that is) and do its duty by marching promptly to 1446.00. The immediate-trend seems to have reversed up, but be wary – this market could spit out bad news as fast as Rosie O’Donnell could make the VFW upset.

Trade well and follow the trend, not the so-called "analysts/experts."

Real Time Trading Signals*for

Trade Date: 1/10/08

E-Mini S&P Trades*
(before fees and commissions):



8:50 VA Buy 5.75 = +.75, b/e

9:03 ID VA Buy 10.50 = +.75, +.50, +.50

9:21 ENG Sell 12.50 = +.75, -1.00, -1.00

9:37 ID VA Buy 13.75 = +.75, -1.25, -1.25

9:43 ID VA Buy 13.00 = +.75, -1.50, -1.50

10:50 ID VA Sell 6.25 = +.75, -1.50, -1.50

10:55 FT Sell 9.25 = +.75, b/e

11:06 FT Sell 9.25 = -1.75 all

11:34 FT Buy 15.75 = +.75, -1.50

11:43 FT Buy 15.75 = -1.75 all

11:46 FT Buy 15.50 = -1.50 all

1:05 FT Sell 13.50 = +.75, -.25, -.25

1:18 ID VA Buy 17.75 = -1.50 all

E-Mini Russell Trades*
(before fees and commissions):


1) Sell @ 9:37am at 712.6 = +1.0 & b/e

2) Buy @ 9:51am at 709.6 = +.5 & +.2

3) Sell @ 10:07am at 708.6 = +.5 & -1.0

4) Sell @ 10:24am at 708.8 = -1.0, -1.0, -1.0

5) Sell @ 10:49am at 709.6 = -1.3, -1.3, -1.3

6) Sell @ 11:42am at 715.5 = +1.0 (1 lot)

7) Buy @ 11:53am at 716.3 = +1.7 (1 lot)

8) Buy @ 12:00pm at 720.0 = +1.0 (1 lot)

9) Buy @ 12:21pm at 719.9 = b/e & -1.2

10) Sell @ 1:09pm at 714.1 = -1.2 & -1.2

11) Buy @ 2:16pm at 727.1 = -.9 & -.9

12) Buy @ 2:35pm at 727.0 = -1.2 & -1.2

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