Thanx Peter; I hadn't looked in the last hour,
It's not always this way, but ever since that LTCM deal it
seems it's more so.
Where that Fed fund rate is trading has a lot to do with fair
value on the futures. The Fair value given by CNBC is
theoretical , and not a hard fast value when your using real
money. It can change in the course of the day, and hinges
on where the fed funds are trading at. Also it's not the same
for every one, bigger outfits can get the money cheaper.
When you consider many of the ones trading the futures are
leveraged 10 to 1, a small change in that rate can mean a lot
to them even in the course of a day.
The effective rate yesterday went as high as 5%
and averaged just above the FED target.
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It's a mess; they call it a free market but you have almost
daily intervention on the part of the FED, and while
most people think the FED is trust worthy, and doesn't
play favorites or leak information to selected "fraternity"
brothers, I don't buy into that.
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At any rate don't fight the FED, or you'll get killed.
Last, while I see some down side , I don't see shorting
with the VIX over 25, time you pay expense it's not worth
it. Spam can come in tomorrow and punt and cause the cost
of futures to get dirt cheap, which in turn can wipe the
market back up.
If you can day trade real fast ( and I can't ) you can exploit
these moves by the fed, my setup makes it to risky.
One time I can log on , but if the market moves fast it seems
I get locked out.
The time to short was yesterday.
Jim
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