What happened today? A bunch of nothing. That is the problem. The FED cut by .25% and signaled maybe a pause depending on how you interpret the statement. On the markets side you had a bounce once again stretching that 1400 level but not getting any sort of meaningful breakout. After that test the market quickly retreated but didn't break strongly down being an overall wash for bulls and bears. If your a dollar bull you have to be severly disapointed. The hope across the street was the Fed would come out much more hawkish putting a dagger in the heart of the short the dollar and long commodities trade. That did not happen. As a result the dollar reversed course across the board. The dollar against the Brazilian Real fell almost 3% from its highs earlier in the day!!!! That is a monstrous move for a currency!! The Yen also reversed course. On the commodity front everything also reversed with gold moving up. Corn was up close to new highs before the cut and soybeans had a very nice move upward. All this probably means more of the same and once again that is the problem. Dollar will not meaningfully strengthen in the short term and commodities won't meaninglfully weaken (talking 20% to 30% moves which is what needs to happen if your a U.S consumer fan).
Anyway to sum up another very weak pansy type of move by the FED that doesn't seem to really change anything. The next two days into Friday will be very interesting to see how the markets react.
A couple of side notes. Citigroup closed at $25.27 which was the stock offering price for the secondary offering. Huge bid at that price kept it from breaking that level. In the aftermarkets which really don't mean much it is below that $25.27. Also XLF once again hit $27 just like the S&P tried to break above 1400 and both got beat down.
Bill Gross and his reaction on the Fed cut.
I have alot more little stuff but I need to get on the road to Austin. Should be interesting the next few days.