The major indices are holding onto gains after the Fed cut interest rates over two hours ago. The Dow Industrials are up better than 2% and flirting once again with the 11,000 level. The S&P 500 Index is surging by better than 4% and the NASDAQ composite is showing life and trading up better than 12%. These are the days that bullish traders live for and should be willing to move up some stops. We've seen some stocks surge better the 30% in the matter of hours and traders should remind themselves that a rate cuts effect might not be felt for months. Don't get complacent or continue to buy stocks at what may now be overextended levels. Instead, think rationally about what has taken place. Remember where we have been and where we are, and then put that in the scope of the last two hours.
NASDAQ Composite Index Chart - last eleven months.
The major trend for the NASDAQ is still downward and there was little reason three hours ago to be bullish. While today's rate cut by the Fed has sparked bullishness here, traders that believe in the technicals to help guide them through turbulent markets understand that there's a lot of damage to be repaired in this index. Traders that were on the alert and bought the Fed rate cut should have some very nice profits at current levels. Don't feel like you will "miss out" on a further advance if you take profits on some positions here and hold a few positions to see what takes place tomorrow. Account management is very important when trading and it is a day like today when it can pay rewards if a pullback takes place.