He sure did!

Bernanke woke us up this morning with an emergency cut on the lending rate to financial institutions from 3.50% down to 3.25%. As soon as that bomb was out I knew the markets would be upset for the rest of the day and we’d see some wild swings across the board, so I decided to stay out of the market until the dust settles a bit.

Let me quote today’s headlines at Bloomberg:

The Federal Reserve, struggling to prevent a meltdown in financial markets, cut the rate on direct loans to banks and became lender of last resort to the biggest dealers in U.S. government bonds … In a further step, the Fed will provide up to $30 billion to JPMorgan to help it finance the purchase of Bear Stearns which has recently collapsed.

Ouch! Certainly an ugly day to be positioned in the markets. I got out through the back door early this morning and switched off my trading station for the day.

Oh, by the way, as a result of these wild swings we’re seeing today the Kiwi (a slow-moving currency pair) has dropped 250 pips today and has knocked my trail stoploss at breakeven. So +109 pips on the first portion of the trade and +0 on the second half.



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