So the Fed went ahead and cut rates by 50 basis points. As mentioned last update, the last two times they did this after a hike cycle were 2008 and 2001, and we all know what happened after that, so this is not particularly encouraging for bulls. We're left to conclude that the Fed thinks the economy is slowing way too fast (potentially already in a recession) and that they need to play serious catch-up. I've heard another theory floated that they cut 50 bps because the election is coming, but that can't be it, because we all know the Fed is a completely independent and politically neutral part... (goes into fit of coughing).
Pardon me, I forgot what we were talking about. So let's get right into the charts! Starting with SPX, which captured its August target:
INDU also captured its trendline target:
In conclusion, the market has reached resistance and an inflection zone. This doesn't preclude further sideways-up action, but bulls will need to power through this level convincingly to generate new momentum to achieve anything beyond that. Things could reverse from this zone. Trade safe.
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