September 18th Fed Wednesday

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I think by now we all know what today is? 🙂 What we do NOT know is how much the Fed will cut rates. My local news said that Fed Chairman Powell alluded to a possible .50% cut, but other sources are saying .25% cut.  Based on market timing using cycles, I can honestly see things going in either direction. With that, I want this to be a ‘to the point’ report.

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The SPX looks good, because it made a new high (all-time high) on day 30. This now makes the SPX right translated and it could go higher with a rate cut, since these daily cycles CAN BE over 40 days long.

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NASDAQ – This is obviously lagging, but it did recover the 50sma. It too could go either way, but a 50% basis point cut would likely send it off higher.  A 25% basis point may help or temporarily disappoint.  We’ll have to wait and see.

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SOXX – They say that the semiconductor sector ‘leads the way’, but this remains quite weak. Will it perk up after the Fed Meeting?  So far

1. It recovered the 200sma and the MACD just crossed up, so that is slow progress.

2. It is still under the 50sma, and it does look a lot weaker than the SPX

3. It is left translated, but a good rally from the Fed Cut Decision may help it to become R.T. too.

 

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THE USD put in a low recently, but it has been weak. I actually said that I thought we would rally up to the 50sma and then possibly become weak again, but so far, the USD remains at the recent lows with a day 5 peak.

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GOLD is right in the middle of a ‘timing’ situation. It is only day 10, so this can rally higher for a couple of weeks really, peaking at day 25 or so. On the other hand, it is the 3rd daily cycle for Gold, and they can be strong (R.T.) or weak (L.T.).   The Big Picture for Gold is bullish, and Rate Cuts should help over time, especially if it is a 50 basis point cut. We’ll see.

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SILVER is tricky. This is a move out of an ICL and we now have a R.T. daily cycle with a peak at day 26 and yesterday was day 27. So today, on day 28, how much higher can it run in a first daily cycle? THIS is a tough call since it is on day 28.  HOWEVER, what if these rallies? Can that be reconciled?

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I HAVE ANOTHER THOUGHT…

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SILVER – WHAT IF Silver does rally strongly from here, is it even possible? If we got a 50 basis point cut, I would say that day 22 could be an early dcl and then we’d be on day 7 here, and that matches Golds day 10 more closely.

 

GDX – So with GDX we also could have an early day 22 dcl, and the day 11 peak would be fine there too.  The other possibility is that we now pull back here for a few days with the rate cut already figured in, but what I see here is a Right translated daily cycle with a new high on day 29 (R.T.) if we do pull back next.

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Today really is likely to be a big day, one way or the other, but WHICH WAY?  It is hard to know in which way the reaction to the news will be, because cycle counts are at a point where the various sectors could go either way. Then you add to that the idea that we often get a ‘Knee Jerk Reaction’ that might be the false move. We could Pop higher today and drop tomorrow or drop today and rally tomorrow, so what does it mean?  It mainly means that the Fed Cut may already be figured in and the bigger picture for The General Markets may include a recovery from that fast, sharp correction and GOLD & SILVER remain quite bullish.  Also, we then may have MORE CUTS in 2024 and 2025, so that bigger picture for Gold & Silver looks good and the USD may continue lower. FOCUS ON THE BIGGER PICTURE after the next few days and for now invest as you are comfortable short term.

Enjoy your Rate Cut Fed Day!

 

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~ALEX

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THIS WAS BITCOIN AT 11 P.M. WHEN I DID MY REPORT FOR YESTERDAY.  I SAID:

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Bitcoin dropped back to the 20 ema area, but it should be early in the move out of the lows. I expect Bitcoin to move higher, but that Fed Mtg could cause some volatility.

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BITCOIN ran up yesterday and then started to pull bac, and this morning Bitcoin is starting the day red, so on day 12 out of the lows, Bitcoin is still moving higher, but the Crypto stocks (many of them) Did a pop and drop yesterday. It is a tough sector to just buy and hold, and I just can’t imagine that a Fed Day will be any easier.