Tomorrow is a pivotal day

[Luckyone]

At 2:00pm on September 18th (tomorrow), the Fed will be announcing their Fed rate decision. 70% of the analysts believe the Fed will cut by 50 points.

A cut by 50 points would normally be a stimulant for the market as it means that interest rates are coming down and likely in a strong way and that means more money available for buying products and for producing products at a lower cost. Nonetheless, inflation could be stimulated if interest rates come down too much.

Either way, I believe that no matter what the Fed does tomorrow, the market will come down. Anticipation of a 50 point rate cut has been the case since the inflation report last week, given that inflation has been coming down all this year. Since that report, the DOW has rallied 1850 points in 1 week and most (if not all) of the anticipation has already been factored in.

In addition, the DOW has rallied more than the NASDAQ 100 and that is not what happens in a bull scenario. The DOW represents "safe" stocks and the NASDAQ represents speculative stocks and when the latter underperforms, it usually means that the traders are not speculating on higher stock prices.

More importantly, September is the worst month of the year seasonally and right now, the DOW is slightly above last month's close and the SPX is slightly below last month's close. The August closes (in the DOW that was at 41563 and the index closed today at 41603 and in the SPX, it was at 5648 and it closed today at 5632) and the "average" move down in September is 2,8%, meaning the DOW should get down to 40000 and the SPX down to 5450 by the end of the month in 12 days.

I did short IBM this morning at 218.72 and it closed at 214.13.

I think that the Fed will only cut by 25 points and that could make things worse. Either way, I expect a down market the rest of the month.

 

[The Duke]

It's going to be bad.
This is the prediction of Nostradumbass.

 

[boevans]

The cut will be 25 bps.

 

[The Duke]

At 2:00pm on September 18th (tomorrow), the Fed will be announcing their Fed rate decision. 70% of the analysts believe the Fed will cut by 50 points.

A cut by 50 points would normally be a stimulant for the market as it means that interest rates are coming down and likely in a strong way and that means more money available for buying products and for producing products at a lower cost. Nonetheless, inflation could be stimulated if interest rates come down too much.

Either way, I believe that no matter what the Fed does tomorrow, the market will come down. Anticipation of a 50 point rate cut has been the case since the inflation report last week, given that inflation has been coming down all this year. Since that report, the DOW has rallied 1850 points in 1 week and most (if not all) of the anticipation has already been factored in.

In addition, the DOW has rallied more than the NASDAQ 100 and that is not what happens in a bull scenario. The DOW represents "safe" stocks and the NASDAQ represents speculative stocks and when the latter underperforms, it usually means that the traders are not speculating on higher stock prices.

More importantly, September is the worst month of the year seasonally and right now, the DOW is slightly above last month's close and the SPX is slightly below last month's close. The August closes (in the DOW that was at 41563 and the index closed today at 41603 and in the SPX, it was at 5648 and it closed today at 5632) and the "average" move down in September is 2,8%, meaning the DOW should get down to 40000 and the SPX down to 5450 by the end of the month in 12 days.

I did short IBM this morning at 218.72 and it closed at 214.13.

I think that the Fed will only cut by 25 points and that could make things worse. Either way, I expect a down market the rest of the month.

Maybe you're not The Wanker. Maybe.

 

[Synthaholic]

The cut will be 25 bps.

Jerome Powell is overly cautious, so you may be right. I'd like to see a full point, but ain't gonna happen.

 

[Luckyone]

Maybe you're not The Wanker. Maybe.

I have only been doing this for 47 years. I am a professional stock analyst, as least as far as charts are concerned

 

[Toddsterpatriot]

At 2:00pm on September 18th (tomorrow), the Fed will be announcing their Fed rate decision. 70% of the analysts believe the Fed will cut by 50 points.

A cut by 50 points would normally be a stimulant for the market as it means that interest rates are coming down and likely in a strong way and that means more money available for buying products and for producing products at a lower cost. Nonetheless, inflation could be stimulated if interest rates come down too much.

Either way, I believe that no matter what the Fed does tomorrow, the market will come down. Anticipation of a 50 point rate cut has been the case since the inflation report last week, given that inflation has been coming down all this year. Since that report, the DOW has rallied 1850 points in 1 week and most (if not all) of the anticipation has already been factored in.

In addition, the DOW has rallied more than the NASDAQ 100 and that is not what happens in a bull scenario. The DOW represents "safe" stocks and the NASDAQ represents speculative stocks and when the latter underperforms, it usually means that the traders are not speculating on higher stock prices.

More importantly, September is the worst month of the year seasonally and right now, the DOW is slightly above last month's close and the SPX is slightly below last month's close. The August closes (in the DOW that was at 41563 and the index closed today at 41603 and in the SPX, it was at 5648 and it closed today at 5632) and the "average" move down in September is 2,8%, meaning the DOW should get down to 40000 and the SPX down to 5450 by the end of the month in 12 days.

I did short IBM this morning at 218.72 and it closed at 214.13.

I think that the Fed will only cut by 25 points and that could make things worse. Either way, I expect a down market the rest of the month.

50 basis points?
Is the economy that weak?
Sounds like panic.

 

[Toddsterpatriot]

Maybe you're not The Wanker. Maybe.

He's really bad at math, just like The Wanker.

 

[Toddsterpatriot]

Jerome Powell is overly cautious, so you may be right. I'd like to see a full point, but ain't gonna happen.

Full point?
How much did GDP fall in this quarter?

 

[Oddball]

He's really bad at math, just like The Wanker.

He also can't tell plural from possessive, just like The Wanker.

 

[Mac1958]

It's tough to say whether 25bps or 50bps would have a bigger effect on markets, but I do think that Powell's commentary will be more important.

People will be listening for clues about Powell's confidence in the "soft landing". If he sounds confident, that could put some fears at ease, separate people from those cozy 5% money markets, and get them back into stocks.

If he's vague to any degree, we may see a continuation of volatility until after the election - or, more accurately, until the fallout of the election is over. And who knows how long THAT will last.

 

[Luckyone]

Here is my recap of today's news and index action:

This was a very important day, from the point of view that the Fed is no longer going to be a force of indecision for the traders. The Fed made it very clear what their intentions are for the rest of the year. They cut 50 points today and they expect that interest rates will be around 4.3% at the end of the year. Given that right now (after the cut), they are at 4.75%-5%, it means another 50-70 points are likely to be seen. That is dependent on the data, of course, but now that the plan is clear, the traders can go back to key on the data and not on the Fed. That will clearly up 50% or more of the uncertainty seen all year in this market and will make charts much more dependable than they have been all year. That is great news, at least for me who depends on charts for my trades.

As far as today's chart action, the SPX (the key index overall), technically had a "key" reversal day. It made a new all-time intraweek high and then went below yesterday's low and closed below yesterday's low (technically, given that yesterday's low was 5618."47" and it closed today at 5618."26"). It also "technically" closed below the 200 10-minute MA, currently at 5618.32. If this gets confirmed tomorrow with a lower low and a red close, all of today's negative signal action will be confirmed, and then if on Friday, it closes below last week's close at 5626, a negative reversal week will have occurred and that will bring in selling interest of consequence for the next 6 days (until the end of the month (a week from this coming Monday), with a target low of "at least" 5546 or lower (the middle of the month's trading range). Whether all of that gets accomplished by the bears, will be the question but that will be the target of the bears, if what I stated above for tomorrow and Friday does occur (more likely than not).

There is no other news of any possible catalytical consequence due out for the next 8 trading days. It is now all about charts and from them, decisions will be made by the traders. I do expect all of the above to happen but then again, this Fed rate cut is a positive for the market and other than some selling being seen because September is a seasonal down month and because the indexes and quite a few stocks are overbought (and the overbought conditions need to be fixed), I do not expect any kind of a crash or even a big down move to occur this year.

 

[odanny]

Yesterday my 401K was at 5.6%, which I believe might be the highest it has been all year long. Today it is up 4.94%, still very good, considering it was in the red for some of the year, and struggling to see 2% most months.

As a personal aside, when I see these increases, it always reminds me to strike while the iron is hot and I will jump online and make a nice withdrawal, above what I customarily do, it makes no difference to me if this is fiscally sound or not because I really don't care, it is a practice of mine that has been reinforced by withdrawals often being followed up by gains that sometimes brings my balance right back to where it was after taking out a chunk of cash.

 

[Harpy Eagle]

Yesterday my 401K was at 5.6%, which I believe might be the highest it has been all year long. Today it is up 4.94%, still very good, considering it was in the red for some of the year, and struggling to see 2% most months.

As a personal aside, when I see these increases, it always reminds me to strike while the iron is hot and I will jump online and make a nice withdrawal, above what I customarily do, it makes no difference to me if this is fiscally sound or not because I really don't care, it is a practice of mine that has been reinforced by withdrawals often being followed up by gains that sometimes brings my balance right back to where it was after taking out a chunk of cash.

are you already retired?

 

[Luckyone]

Yesterday my 401K was at 5.6%, which I believe might be the highest it has been all year long. Today it is up 4.94%, still very good, considering it was in the red for some of the year, and struggling to see 2% most months.

As a personal aside, when I see these increases, it always reminds me to strike while the iron is hot and I will jump online and make a nice withdrawal, above what I customarily do, it makes no difference to me if this is fiscally sound or not because I really don't care, it is a practice of mine that has been reinforced by withdrawals often being followed up by gains that sometimes brings my balance right back to where it was after taking out a chunk of cash.

One of the problems that is occurring is that the Fed is evidently seeing a slow down in the economy and that is why they are being aggressive in lowering interest rates. That means that it is unlikely that the market will be heading higher anytime soon. It is unlikely to crash but it is also unlikely go continue to make money for the bulls (at least in general).

 

[Luckyone]

are you already retired?

Yes, I am 79

 

[odanny]

are you already retired?

Yea, I took more money out of my 401K last year then I ever made in 29 years of working, and I got the biggest tax return I've ever gotten in my life. Retirement, especially depending on what state you live in, brings in all kinds of financial freebies. I only pay tax on my measly pension is why, my 401K is what I live off of and spend. And it keeps growing, it is almost back where it was when I retired 02/23.

 

[odanny]

One of the problems that is occurring is that the Fed is evidently seeing a slow down in the economy and that is why they are being aggressive in lowering interest rates. That means that it is unlikely that the market will be heading higher anytime soon. It is unlikely to crash but it is also unlikely go continue to make money for the bulls (at least in general).

I have half of my portfolio in cash, a gain of 3-5% per year will come very close to replacing what I am taking out of my 401K annually, based on my present lifestyle. These are things you really can't prepare for (market averages apply here) before you retire because you've never been retired before.

 

[Synthaholic]

One of the problems that is occurring is that the Fed is evidently seeing a slow down in the economy and that is why they are being aggressive in lowering interest rates. That means that it is unlikely that the market will be heading higher anytime soon. It is unlikely to crash but it is also unlikely go continue to make money for the bulls (at least in general).

They're seeing a slowdown in the job market, not the economy.

 

[Luckyone]

They're seeing a slowdown in the job market, not the economy.

Think about it for a second. There is a slow down in the job market. What does that mean about the economy?

If there is no slow down in the economy, there is NO REASON for there being a slow down in the Job market. They go hand in hand.

What the Fed is trying to do with the Fed rate cut is keep the economy going forward so that they keep the job market at an even pace and growing. More profits mean more jobs.