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Rate cut today
The Fed's decision on interest rates will
be announced today at 2:15 PM ET. We should either see a 0.50%
cut, or 0.25%. The market reaction should be interesting.
Stocks rallied again yesterday on light volume keeping our head and
shoulders pattern intact. I can see a possible move up to 1380 to
1410 area sometime in the next day or two, whether that move is before
the Fed announcement or after, but that may be it. Resistance is
fairly strong above so any rally may be hard pressed to go much further
than that.
Chart provided courtesy of
www.decisionpoint.com
When there is a big move in stocks the day of an FOMC meeting, there
tends to be a reversal in the days following. I like the idea of
being on the sidelines here as we could get a sell-off after the Fed
announcement, or we could see a rally up to resistance, then a reversal.
Of course I could be wrong and we could see a strong rally that keeps on
going, but that is the underdog based on the charts.
We're also getting overbought
again.
January did not live up to its historically positive bias and February
is one of the weaker months, but after January's dismal showing, might
we see a rebound in February?
Chart provided courtesy of
www.sentimentrader.com
Chart provided courtesy of
www.sentimentrader.com
I'm going to cut it short today.
We should have more to talk about tomorrow, so we'll see you back
here then.
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