Walstreet Today : March 18, 2008

Source : cnn.com/money

Markets ended with high on Walstreet today on account of Fed rate cut to take the interest rates to 2.25%. Dow bounced up by 420 points with a gain of 3.51%. Nasdaq and S&P are also closed in green with each gaining by more than 4%.

Triggers for today's market:
1. Fed cut the funds rate (short term lending rate) by 75 basis points taking it to 2.25% where as the market expectation is around expected 100 basis points cut. Refer to my blog post earlier on March 13,2008 and March 17,2008
2. the quarterly earnings from Lehman brothers and Goldman Sach's beaten the street's expectations
3.Dicount rate (effects bank loans) cut by Fed, to take them to 2.25%
4.Dollar gain against Yen in the currency market after hitting all time low on Monday.

Benefits of today's move:
All financial stocks based on the results announced by Lehman and Goldman

How it impacts India :
With the move by Fed in cutting 75 basis points and the way US markets responded to the news, SENSEX and NIFTY should open with positive gap up. The banking stocks and financial stocks which took severe beating over the last couple of weeks, should recover today and hopefully other sectors like IT and FMCG

My strategy :
Two strategies for today.
1. Go long till the sun outage from the time market opnes and then go short once the NIFTY crosses above 5500.
2.Buy PUT's at 5500 levels for a premium of around 100-125 and give atleast 3-4 trading sessions (Mostly next monday) to square off in March contracts.

Leave your strategy and suggestions in the comments.