BROAD STOCK MARKET UPDATE and COMMENT ON THE FED MEETING (4:00 pm EDST)
Oooops! In yesterday's blog I speculated on the consequences of an FOMC meeting next week, not realizing that meeting was today. Oh well, we will see the Fed's effect on the markets much sooner now. As expected, the Fed did cut rates (1/4 point) for a third time in a row; however, the Fed's statement and Chairman Jerome Powell's rhetoric in a press conference following the rate cut announcement is suggesting that there won't be another rate cut anytime soon. This mixed dovish/hawkish message from the Fed did not stop equity markets from taking off just after the 2pm rate cut announcement. The DOW gained a little over 100 points, but this brief rally seemed to lose a little steam in the last hour of trading. We now wait to see if this rally can push higher. The S&P 500 is making new all-time highs unaccompanied by the DOW and NASDAQ so we still have a bearish divergence signal in place that could be suggesting a turn down now. We are also in our new reversal zone (Oct. 29 - Nov. 8), but it is early, and there's still plenty of time for markets to push higher, possibly even into next week. If the S&P 500 can break and close above 3055, this market could turn very bullish. Let's stay on the sidelines of the broad stock markt for now. If we do get a pullback from a high this week or next week, it may not be that serious and it may give us a good spot to go long.
Oooops! In yesterday's blog I speculated on the consequences of an FOMC meeting next week, not realizing that meeting was today. Oh well, we will see the Fed's effect on the markets much sooner now. As expected, the Fed did cut rates (1/4 point) for a third time in a row; however, the Fed's statement and Chairman Jerome Powell's rhetoric in a press conference following the rate cut announcement is suggesting that there won't be another rate cut anytime soon. This mixed dovish/hawkish message from the Fed did not stop equity markets from taking off just after the 2pm rate cut announcement. The DOW gained a little over 100 points, but this brief rally seemed to lose a little steam in the last hour of trading. We now wait to see if this rally can push higher. The S&P 500 is making new all-time highs unaccompanied by the DOW and NASDAQ so we still have a bearish divergence signal in place that could be suggesting a turn down now. We are also in our new reversal zone (Oct. 29 - Nov. 8), but it is early, and there's still plenty of time for markets to push higher, possibly even into next week. If the S&P 500 can break and close above 3055, this market could turn very bullish. Let's stay on the sidelines of the broad stock markt for now. If we do get a pullback from a high this week or next week, it may not be that serious and it may give us a good spot to go long.
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