Fed injects Cash to save Banking sytem --> $1480 profits
5 min Emini Nasdaq 100
Hi,
I can't tell you how much I am enjoying these few weeks. Market volatility is up. Fed is moving in.... nothing could be better for day traders...
Market gapped down today by around 15 points. again. this is a big gap down... we would expect market to move in the direction of the gap.. I did not enter the market... I was just monitoring the market...
I entered only upon hearing that the FED injected another $16Billion into the banking system and my stochastics started to turn up.. it seemed apparent that price is going ot close the gap.. I longed 1 contract at 1912 and another 2 more contracts at 1932 when price broke the resistance line formed by today's open... I held it all the way till it hit the moving avearages and bounced back with a red candle.. I exited at 1950 with $1480 profits.
Fundamentals:
The U.S. Federal Reserve provided the banking system with $38 billion on Friday, the largest amount of liquidity since the days after the September 11 attacks six years ago, adding ample funds for the second day running as financial markets fretted over credit conditions.
Before Wall Street's opening bell, the Fed infused $19 billion in a market operation that was conducted more than an hour before its usual time.
By mid afternoon, the Fed conducted two more cash injections -- $16 billion and $3 billion -- a highly unusual but not unprecedented occurrence for a Friday.
The last time the central bank made a similar statement was after the September 11, 2001, terror attacks, when it also said it would do what was necessary to keep markets functioning normally. The Fed made a similar vow in October 1987 following a precipitous decline in U.S. stock markets.
The fed funds rate was trading at 6 percent in early morning trade, but fell back to 5.25 percent shortly after the operation, in line with the target set by the central bank. It was last trading at 5.25 percent.
The Fed said all of the collateral accepted in the 3-day repos on Friday was mortgage-backed debt.