WALL ST. YAWNS AT RATE CUT

JANUARY 30, 2008: The Fed in a desperate attempt to prop up the US stock market cut another 1/2% on the Fed funds rate bringing it down to 3%. This makes it a 1.25% rate cut in just over a week. They also cut the discount rate by 1/2% as well. Markets initially rallied on the news and then sold off into the close as the smart money headed for the exits. The Nasdaq reversed off its highs in heavy volume and closed down 0.4%. The small caps as measured by the S&P 600 were hit harder and fell 1.1%. Financials should have rallied on this news but the XLF fell 2%. So much for the Fed being able to manipulate the markets. Stimulus packages, multiple rate cuts, bail-outs, etc. have failed to change the direction of the markets, which is now decidedly down.  Counter-trend rallies during corrections are by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day before committing money to the long side of stocks. More info at www.goldenticker.com

Countrywide Financial CEO Angelo Mozilo cashed in on $130 million in stock and it was just reported yesterday that 33% of their subprime mortgages are delinquent. Something is terribly wrong here.