Oct
10
2008

  Stressed Out at the Fed

I got a call from my friend who works at the Fed in NYC. She said she'd have to work through the weekend and wouldn't be able to meet me and Terry for dinner on Sunday night. She sounded so stressed out and tired, I can only imagine what they're going through over there. Especially since none of their interventions are preventing stock prices from falling.

I was laughing a bit as she was explaining how she felt really bad, etc. and told her not to worry about it! I was actually shocked earlier in the week when she said she DID have time to get together-- I had assumed she would not, so it was not a surprise to me that she would have to be busy with work after all.

She and her husband are several years younger than Terry and me, and she admitted she is still overly optimistic that she'll have time to do things despite the crisis at work. When Terry and I were both working while preparing to sell AFS, we knew better than to set dates to see our friends until the deal was done. But we had already been through the sales process once before, so we knew what was in store. The Fed hasn't seen anything like this since the 1920s I suppose, so there could be no predicting the workload necessary to prevent the collapse of the national financial system. But I'm sure I can't even imagine how they're freaking out over there.

I'm pretty calm, I made an excellent trade this morning, selling SKF before the market opened for a really great price. However, it made me cocky and I still thought I'd do alright on the DIA and SPY I bought yesterday. But the triangle pattern I had hoped to breakout up had a flat bottom, which statistically points toward a breakout down, so I decided to cut my losses and sell. Bad call-- the market did eventually take off in the last hour of trading. But it also fell again in the last fifteen minutes. It was quite volatile. It wasn't the right bet, but it was a decent trade given the circumstances. It really could've broken down further (and may go further down Monday, we'll see) and I'm better off having limited my losses for sure and missing the upside (the prices never rose enough for me to make a profit anyway, I just could have reduced my losses a bit) than holding out in the hope of a profit and winding up losing more than I anticipated. There will be plenty of opportunity to buy when the bottom is RE-tested. I may have to wait until December or January. There is still a chance I'll try again to get in on a rally, but I'm really going to have to watch the charts. If it's too risky, I might choose to sit it out, even if I miss yet another rally. It's easier to make up for missed opportunities than to recover from losses.