I think we will look back on 2007 as the year wallstreet cried for a rate cut and never got one. Everyday the markets move higher the chances fade once again. As the markets were falling CNBC paraded the usual suspects in front of the cameras Wayne Angel, assuring everyone the fed will cut, now that he markets are rising they will just stop putting him on.
Right, we'll see how the markets react to the ISM and NFP numbers which will be released BEFORE the Fed meeting. I think these (not the numbers, but the markets reaction) could give us clues for the likelihood of a cut: Sep 04 10:00 ISM Index Sep 07 08:30 Nonfarm Payrolls Sep 18 14:15 FOMC policy statement
It's sort of like this:Technical analysis is a windsock, not a crystal ball. Be prepared to adjust your tactics and strategy if conditions change.
To be honest, no, I don't think this Fed will be too concerned with the stock market performance. Regardless of where stocks go till Sept., I think they will look at ISM and NFP (amongst other things) and see if they can justify a cut or not.
80k contracts traded on YM, 164K on NQ, that is some light volume indeed @ 12:50cst. What I see right now is a market that is making lower lowers, and lower highs. It may change, but until we take out 1500, it is what it is. Now if you want to look at a weekly it will show the up trend still intact, a bear market starts on the daily the works over to the weekly long after we are in a down trend.
<i>"I don't think this Fed will be too concerned with the stock market performance."</i> Why a token rate-cut on option expiry Friday, hours ahead of the bell? The Fed is clearly and blatantly fixated on stock-market performance, they have been since Gspan's beginning reign. Don't believe the b.s. lies about not caring... they care deeply. Consumer sentiment drives the economy. One big pillar of consumer sentiment is stock market performance.
A 10% market drop is nothing out of the ordinary in a historical context. Yes, maybe they were out to scare short sellers with the cut on OE day, you never know. But historically you don't see the Fed panic on every 10% drop in the SP500. I think it takes more in terms of a drop, maybe 25%, 30%, 35% (and especially a longer time frame than four weeks) to meaningfully impact consumer sentiment. P.S. Reg. the conspiracy theory: I found it interesting that the Nikkei dropped -5% THU night before OE. ES was down around 2% in the morning hours. I wonder if the Nikkei drop in conjunction with OE had an impact on the Fed decision. I guess we'll never know.
<i>"But historically you don't see the Fed panic on every 10% drop in the SP500."</i> We saw that last week, now didn't we?