c08 JWBT016-Busby September 30, 2008 14:0 Printer: TBD
104 STRATEGIES TO WIN
FIGURE 8.4 Chart of prices just moments before the Fed announcement on
March 18, 2008.responded with a 0.75-basis-point cut. That is a nice reduction in rates, but
the market was not satisfied. Initially, prices dropped on the news. That is
just a reminder that one cannot guess the market’s response to economic
information. The immediate play was a short.
After reason and calm returned and the bears stopped partying, the
bulls stepped back into the market and took the market up. The Dow rose
420 points and enjoyed the single biggest day gain it had seen in five years.
Figure 8.4 lists the Seven Sisters and the important prices on March 18,
2008.
The March 18, 2008, trade is shown in the chart in Figure 8.5. The Model
“T” was a buy, and at DTI we enjoyed riding the prices up.FIGURE 8.5 A 15-minute chart of the E-mini S&P futures on March 18, 2008.