Why did the stock market perform badly today after RBA rate cut?

[Gringotts Bank]

When central bank cuts interest rate, shouldn't this be bullish for stock market? This is usually the case for U.S markets when the Fed cuts interest rate. Why did the stock market here perform badly after RBA cut rate today? Why do we interpret this market action?

'Good' news disregarded = bearish market conditions.

'Bad' news disregarded = strongly bullish market conditions.

The fed is a weak, one-trick pony. It has only one button it can push - interest rates. If things go badly, they push the button and hope something will happen. If nothing much happens they push it again. If nothing much happens they do it again and again and again. Eventually people catch on... the medicine is not only misdirected, it also comes with side effects.

 

[luutzu]

People need to just learn Warren Buffets fundamental analysis techniques. If you are too lazy to get on your private jet and go personally to see the board of directors and ask them what is going on with your company then there is your problem

Not so much Buffett, but Graham, Dodd, Fisher.

Buffett is thought to epitomise fundamental/value investing etc., but those other three people up there are much smarter, more original.

Buffett have told us this. Just that we think he's being modest.

 

[lockscombi]

Thanks guys. Gee I have a lot to learn. Suddenly this game has become alot more fascinating to me. Scary fascinating. Insider trading must me through the roof in this game. I would know coming from a gambling back ground where the house ALWAYS wins. I agree the only real defense to it is understanding the charts and looking for the signs. I will learn some chart analysis techniques post haste!

Cheers

 

[Roller_1]

Thanks guys. Gee I have a lot to learn. Suddenly this game has become alot more fascinating to me. Scary fascinating. Insider trading must me through the roof in this game. I would know coming from a gambling back ground where the house ALWAYS wins. I agree the only real defense to it is understanding the charts and looking for the signs. I will learn some chart analysis techniques post haste!

Cheers

Don't get hung up on insider trading or 'bots' undercutting everyone that people like to talk about, it's just extra 'noise' that makes it harder for a beginner to learn. Just find a strategy that suits you - whatever that maybe. Then trade it

 

[Valued]

Thanks guys. Gee I have a lot to learn. Suddenly this game has become alot more fascinating to me. Scary fascinating. Insider trading must me through the roof in this game. I would know coming from a gambling back ground where the house ALWAYS wins. I agree the only real defense to it is understanding the charts and looking for the signs. I will learn some chart analysis techniques post haste!

Cheers

The other way around it if you are concerned about stock market manipulation is to not trade stocks. Index futures are less susceptible to manipulation then say a micro cap research and development stock.

 

[Quant]

Why intra day moves happen generally has zero to do with logic , i think RBA ann that are expected need to be taken into context with regards to market price ( value) . Short term its the crowded trade that gets hurt mostly on kneejerk reaction to data driven news , Generally AUD will be hurt by rate cut but in this case AUD was of in advance and the crowd was short AUD , after initial reaction shorts were squeezed out the door for next 12 hours with a near 150 pip move of lows , defies logic hey ... Most of the time i am not interested in WHY , its more to do with human psyche than logical market/economic thinking . Good luck working it out