Waiting for the Fed can leave you stuck.

Since the Fed decision on interest rates will come after 2 PM ET, you will be stuck with your allocation for 2 hours today and all of Wednesday before a change can be made based on that interest rate decision. 

That might be a good thing because the market will do a lot of zigging and zagging right after the announcement and make it tough to make a call for those who like to play the short term action.  Then, just to make things more difficult, the indices seem to go in the opposite direction of the initial reaction a day or two later.  It is very difficult to decide what to do if you are using the current market direction as your guide.  Our one to two day delay makes it even tougher.  So what do you do?  You stick with your plan.  That's why we use indicators.  It will take the emotion out of it.

I only have one other thing to talk about today and it is something I talked about many times earlier in the year.  It is the comparison between the 1994 and current S&P 500 chart.  I've marked up the the two charts below.  1994 is on top, then 2005. 


                            Chart provided courtesy of www.decisionpoint.com

The area on the charts marked "G" caused me some grief this year.  I was expecting that pullback to be close to the severity of the 1994 pullback and possibly move to the prior "E" low.  Instead, and rather ironically, just as we when we experience the London terrorist attacks and a potential reason for a sell off, the market bottomed out and went back up instead of testing "E".  That caused me to miss some nice gains.

So while there are uncanny similarities in many areas of these charts, we can't expect them to play out exactly.  It's a good tool but we shouldn't use it as a primary indicator to buy or sell.  But if we do get a 1994 "K" like sell off in the near future, it will likely set up the buying opportunity I have been waiting for.

That's all for today.  Currently 100% G fund.  Thanks for reading.  See you tomorrow.