Thee Calm Before........ The Fed (and After?)

More Volatility Ahead?

Markets are in a state of shock Tuesday mourning awaiting the 2:15pm Eastern time US interest rate announcement. Sunday's slaughter of Bear Stearns has evaporated  as it appears to me that Intervention is at work around the globe to avoid systemic panic. This is is a good thing - I think.... Ben Bernanke and his advisors (who ever they are) have done a magnificent job of keeping the markets orderly. As of this writing the DOW is up over 250 at 12,222 points and the S&P 500 is up over 30 points at 1308. Bravo Ben!

Euro Trending Nicely against the Dollar - Click Chart to Enlarge

2:15 - The Moment of Truth - Save or Kill the Dollar

At 2:15 the currency markets will show just how much (if any) intervention is at work - as the guessing game for Interest rate announcement ranges from a 1.25% cut to people like myself that say rates should hold steady at current rates. If they surprise by holding rates (please!)  then the dollar may rebound quickly and help to establish a sense of security in the financial markets  liquid. The Flip side - The Fed already cut .25% in a surprise move on Sunday - a smart move - so if they lower a full point - It might be look out below...! It might even signal a new Gold Rush.

You can tune in to my live Webinars every Monday at 7 am EST and Today I will be covering the FOMC interest rate announcement - live on FX Street - Free - Click here to register.

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), Tune into his broadcasts weekly on FX Street with "1stonForex the Week Ahead".  He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 Minute Consultation