Savvy Trades and Investments

[cliffvb]

Good article, I have no doubt that CTAs aka computer trading algorythms were a big factor in the volatility last week. It does seem odd to me that the small and micro caps suffered more since I doubt that the big boys have their computers rigged to also sell them.

Reading the omments, I found this one to be interesting, keeping in mind that most believe it is concerns over continuing Fed tightening that caused the current sell-off:


Today 's Fed discount rate is 2.75 ..
Fed discount rate at Sept ,2004 was also 2.75 and went up from there all the way to 6.25 around June,2006 ... same period S&P 500 went up 30% !
This is history !

The Fed increased the discount rate by 400 basis points over 21 months back then. The Fed expects to raise the discount rate only 100-125 basis points over the next 15 months and the market is in panic mode now?