Feds cut rate

Just saw the news that Fed cuts discount rate to 5.75% to ease credit crunch.

The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from regional Federal Reserve lending facilities. It differs from the key federal funds rate, which is the rate at which private institutions lend to other depository institutions overnight.

The result, as I type this, DOW INDUSTRIALS up more than 300 points in opening minutes; NASDAQ up 2.5%.

So we clear of the woods ? Not yet. This will put breaks on further market slide provided there are no more ugly news from sub-prime market coming across.

So now we can look at a few findamentally strong companies. These stocks are best poised for a sustained rebound on the ASX.

BHP
RIO
WES
CBA
CTX
LLC
COH
CSL
OXR
WOR
ANN
ANZ
UGL
NCM

Hunting.

I am now cautiously bargain hunting. My shopping list consists of

FPH
OXR
BHP
BSL
CEU
CUE

Now these stocks, to me, have been oversold or resisted the selling pressure quite well and hence tomorrow I will see if I can pick them up cheap. Mind you I will take small positions in them if at all and will keep a finger on the sell button as well. This is a very volatile market and caution is the key.

The day after, or the day before ?

Friday night the US stock market saw a major correction. So on Monday I am not expecting a major rise in the XAO or probably any Asian market except China, which continues it run.

I still believe this is a correction and not a crash, yet. This should be a great time for bargain hunters. The question now arises, should I look for some good bargains like BHP, CTX and OXR ? The risk is that there might be further drop in their stock price. I guess the prudent thing to do at this stage would be to poised and be ready at the sidelines and when the market stabilises, then I can pounce on any good deal that presents itself.