February 1st – Post Fed Action
We had another rollercoaster ride during the Fed Speech. At first he surprised everyone when he mentioned that inflation was decreasing quickly and an ‘adjustment to monetary policy’ would have to take place in 2024. I was watching the markets intraday and the QQQ, SPY and even GDX took off very quickly upside. Then during the Q&A part of his speech, he said that many have been talking about rate Cuts in March, but that The Fed Committee have never expressed that, and that March would likely be too soon for the Fed to see the need to cut. Crash went the markets, and this is what it looked like…
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QQQ INTRADAY –
1. The markets rallied with the Fed and it looked like we would close at the highs on the good news.
2. Next came the bad news and we closed at the lows, so…
SPX – Our markets looked like they just sold off all day, but they didn’t. We rallied at 2 p.m. to the highs, and then sold off sharply into the close. Now the question is, “Was that just a Fed ‘knee jerk sell off’, because he discussed delayed rate cuts? Will the markets digest that news and reverse higher on Thursday or Friday, knowing that at least we are still getting cuts? We’ll have to wait and see, but this is only day 17 of maybe 35, so we are probably only 1/2 way to the next dcl.
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When you think about it, someday we may just look back and see this and we will not remember anything about the Fed on day 17. We could simply think to ourselves, “Well, that was a breakout and a normal back test to the 20 ema.”
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WTIC – Oil dropped and we continue to have that difficult chop . Oil is crawling along the 200sma.
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THE USD also just continued to chop sideways.
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GOLD Thursday Morning – Gold popped and put in a new ‘peak’ on Fed day (Day 10), but it also sold off and today it is red. That may be the peak for a l.t. daily cycle.
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SILVER Thursday 6:30 am ET- Silver is selling off post fed, and this is what I have expected. We are in the 4th daily cycle and they are weaker than the rest.
GDX had the same POP and drop after the Fed, and it ended up selling off QUICKLY in the final hour. JDST took off to the upside…
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JDST INTRADAY – I was watching JDST and it basically went sideways until the Fed Decision.
1. You can see the rally into the no rate cut decision. GDX sold off.
2. Next the Fed discussed ‘adjusting monetary policy’ and ‘rate cuts’ in 2024 and JDST sold off and GDX rallied.
3. Then during Q&A Chairman Powell dashed hopes of a cut in March and GDX slammed down and JDST took off sharply higher. This is why I always say that it is unwise to ‘trade’ the moves during a Fed speech. I point this kind of action out at every single Fed Mtg.
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