Stock Market Analysis

Wednesday, September 16, 2015

Investors Cheered... to what?

Investors cheered today as the housing market index turning in better than expected, encouraging them to turn the tide on the declining market after its release at 10am. This is also the first piece of good news today in a week full of much worse than expected economic data.

If you ask me, the rally yesterday and today are all really bets on tomorrow's Fed decision. So, whats the big deal about tomorrow's Fed decision?

Investors want to know from tomorrow's announcement whether the Fed is still on track with rate hikes in September (bad) or actually deferring it to December (good). Frankly speaking, from an economics point of view, it really makes little to no difference to the economy whether it happens in September or in December. However, the real effect would be on the stock market as investors act ahead of the chain effect that I mentioned a few weeks back. Either way, September or December, with global market and economic data so shaky, investors are still going to be largely bearish by the time it happens, I am sure the Feds know that and that it makes little sense to prolong the agony on something they are so bent on doing. Looking at the internals, we can see that bond yields merely nudged upwards by a tad while total equities put call ratio actually rose in favor of the bearish camp. These are not signs we see on a truly bullish day. On the technical front, the SP-500 is now in touch with its declining 30MA, which is usually where it turns downwards from in a bear market. If it does that, it would confirm this as a bearish continuation pattern, i.e, bear market.

On the sidenote, I am truly happy for the great response to my daily forecast this past few weeks and I am actually getting people asking me for lifetime subscriptions! Yes, if you noticed, I don't post my daily analysis here everyday. Those days you don't see me posting, I email to paid subscribers. So, if you wish to be on my list for life, please sign up HERE for just a ONE TIME investment of $99!

Market Crash Timer: ORANGE

For now, the market remains in short term neutral trend within an intermediate bear trend and primary neutral trend.


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