Fed definitely in panic mode

3/17/08

With Fed announced new round of rescue plan to save financial crisis, market is tested the support area 11750 and close in Green territory to celebrate St. Patrick Day. But Nasdaq & S&P still close below water. Market is so nervous that Lehman brother would be next to fall(If you are big client of Lehman, would you like to withdraw whole account and get cash or still believe the Fed could inject enough money?) The new lending facility created by NY Fed to help primary investment banks(MER,LEH,MS,GS,STT,....etc) prove the Fed need to restore the balance of the credit market. But the time will tell if this act would really solve the issue or just another bandit to cover the wound. Expect tomorrow the Fed must reduce 100 basis point to restore confidence for the economy and market. If Fed does give surprise move of 125basis point( 1st time in 23 years to reduce interest rate more than 75 basis point), market would rally up or trade above 12300 level. Financial stocks probably would get the greatest benefit from the Fed move and market need it to give good mood for Visa IPO debut on Wednesday this week. Market is closed on friday(Good Friday). Let see how the Fed do more magic to bring back people confidence.