tsptalk's Market Talk

[FAAM]

OK (?). I feel the good vibes in the air - for now(?), election & seasonality-wise, economy & Fed-rate-wise, etc. I have been on the bandwagon (fairly evenly across CSI funds with a good dose in F) but left a leg dragging in G; today I IFT'd and picked the leg up on that wagon, only leaving a foot on the G-pad.

 

[JTH]

I've heard talk that the cut itself isn't as important as the projected frequency of cuts down the road.

Thus we get a .25% cut, but the frequency of future cuts will be faster.

 

[tsptalk]

The odds now are leaning on the 0.50% rate cut side. I've seen some weakening eco data recently but it is an election year and any move the Fed makes may seem political so who knows what they'll do?

Will the market be disappointed with 0.25% or will that give relief of their assessment of the economy?

In hindsight with employment data getting softer, they probably should have just done 0.25% in July and another 0.25% in September.

The big question for us is, what will 0.25% do to the market? What will 0.50% do?

 

[tsptalk]

Will they go 0.25% or 0.50%. The Fed is about to cut interest rates while the S&P 500 is tagging all time highs and we're trying to figure out how much they'll cut?

This is either the greatest set up for a bull market ever (especially with that inverted head and shoulder pattern) or the greatest sell the news set up ever.

They aren't cutting rates because the economy is running on all cylinders.

It's tough to be bearish given this set up, but something seems off.

 

[tsptalk]

The calm before the storm. I don't have much to say that I haven't said 20 times in my daily commentary - at least until after the Fed decision.

Stocks are flat, bonds are down as yields move higher.

Oil and gold are fairly flat.

Oil is flat.

Bitcoin is down slightly after yesterday's big run up.

Everyone is waiting.

There's 61% probability of a 0.50% rate cut.

Any guesses?

I say 0.25% so they can move another 0.50% after the election.

 

[nasa1974]

The calm before the storm. I don't have much to say that I haven't said 20 times in my daily commentary - at least until after the Fed decision.

Stocks are flat, bonds are down as yields move higher.

Oil and gold are fairly flat.

Oil is flat.

Bitcoin is down slightly after yesterday's big run up.

Everyone is waiting.

There's 61% probability of a 0.50% rate cut.

Any guesses?

I say 0.25% so they can move another 0.50% after the election.

That's as good a guess as any. More conservative anyway.

 

[tsptalk]

There's 61% probability of a 0.50% rate cut.

It's still above 50% but falling...

 

[weatherweenie]

Wondering if there is a sell off, if the cut is only a quarter point.

It's still above 50% but falling...

 

[tsptalk]

Maybe initially, but Powell may be able to sell it at the Press Conference.

0.50% could also scare the market if Powell can't sell it.

 

[nasa1974]

Maybe initially, but Powell may be able to sell it at the Press Conference.

0.50% could also scare the market if Powell can't sell it.

Powell sold it but will the bounce hold until closing?

 

[tsptalk]

Powell sold it but will the bounce hold until closing?

No.

My Monday morning quarterback analysis.

 

[nasa1974]

What a ride. Good thing I had a fresh pair of sticky pants on.

 

[tsptalk]

A gap and go above the inverted head and shoulders patterns? It is quadruple witching expiration week, which makes it suspicious, but what a nice set up.

 

[tsptalk]

Yield curves are steepening from inversions. This happens when the Fed cuts rates aggressively and that usually happens when the economy is in trouble. Powell says that is not the case, so why so aggressive? :suspicious:

The stock market looks good but something doesn't smell right.

 

[JTH]

It's been a good run, I should be approaching the euphoric zone, that one zone where I begin to think I'm a good trader and my infallible "system" is working...

:banana:

 

[tsptalk]

The yields are up, almost across the board (Only the 3-month yield is slightly lower), and the dollar is also up, a combination we might not expect with the Fed cutting rates.

Stocks are also struggling early giving the dip buyers something to nibble on if they are in FOMO mode. The problem is, if the dip buyers are not showing up, what does it mean? It's early and the bulls may jump in any minute so it's hard to say.

It is a quadruple witching day with many options and futures contracts expiring at the close, plus there will be some reshuffling of the S&P 500 index when Palantir will be added.

Next week is one of, if not the most negative weeks for stocks of the year historically, especially when there is a big gain for the year heading into, but that's not a guarantee that it will be down. However, it would likely be a good reason to see some profit taking today.

Other than that, the charts look good with some open gaps below that could cause some short-term volatility.

 

[FAAM]

Don't like the Seasonality for next week or two, yet the POTUS election year factors in to moderate that somewhat for me. So far at mid-day, looks like (S&P5k) dip-buying arrested the drop & perhaps that's all the damage for today(?). Given Coolhand's update that NAAIM smart-money is moved from neutral to more bullish, and JTH's statistical charting and narratives over the last day & a half showing fairly good odds for positive outcomes over the next 6/9/12 days... WELL, I was thinking of pulling a quarter or half my CSI back to G with 2nd IFT, but not doing so -- will be a'holding for now I guess.
THX again for your posts!

 

[tsptalk]

FedEx effect...

 

[tsptalk]

No post quadruple witching expiration reversal yet and there's lots of green, although it's on the flat side, especially small caps. The S&P had broken out while the small caps (dwcpf) is back below the breakout point.

Yields and the dollar are moving up with the 110-year breaking though some descending resistance. Interestingly, the 10-year has been going up sine the rate cut by the Fed.

This is the worst week of the year for stocks historically, but the Fed just cut rates by 0.50% so they have a catalyst.

 

[tsptalk]

We've got some weakness to start the day, a possible Turnaround Tuesday, but after the run we've experienced over the last two weeks, this may be what is needed to make some of the extended charts look a little more healthy.

Seasonality suggested that we expect some bumpy action this week, but September has been a bullish surprise so far.

Fed governor Bowman has been speaking out why she dissented from the 0.50% rate cut decision, as she is still concerned about inflation. We get the key PCE Prices data on Friday.

Small caps are either creating a bull flag here or they are eyeballing the open gaps below, after hitting the tripe top.

The market leading Transports are trying to bounce back as the chart retraces the recent FedEx driven breakdown.

The 10-year yield is flat, gold and silver are up, and bitcoin is down slightly.