Fed does confirm recession in rate cut decision

1/30/08

Fed does make rate cut 50 basis points today to avert economy going recession. However, in my opinion, fed does reduce 125 basis point within 30 days period and this act has been proved that US economy is really Really in bad shape(even when last recession the Fed did not cut 125 basis point within such short time frame). As I mentioned yestersday, market does react the 50 basis point cut and rally from negative zone to almost 200 up points but closed below 37 at 12442. This is it and traders are waiting to see the employment report friday. Enough for US stock markets lately.

Chinese Shanghai Composite index has been on an agressive rise and has been failing to the downside since last Novermber. That downward force has not taken the index to a major critical support level. This level need to hold or the Shanghai could experience a precipitous drop from here. If that happen, it would put pressure on US stock market as well. Let us put attention on both market closely.

Hong Kong HangSeng Index need to be retest 22000 level and eventually it will test 20000 or lower to 18000 level.

Anyway, global stock markets are in a critical moment to decide it has longer bear market or not.