Market up but waiting for fed

I was out Christmas shopping. No, not holiday shopping, or winter celebration shopping, but actually Christmas shopping. I’ve had enough of political correctness. So the market was up today, but after the initial surge most indexes just chopped sideways with little further direction. Traders know that on fed day, which is tomorrow (Tuesday) that the markets will get whacked around in both directions on the announcement. Some are hoping for a 1/2 point cut, and some are hoping for 1/4 point cut. Either way there will be disappointed traders. A 1/2 point cut might cause worry as some traders might think the fed is more worried that it needs to be, or knows something the rest of us don’t. While a 1/4 point cut might not seem to be enough. The fed will probably try to satisfy both camps by doing 1/4 point on the funds rate, and a 1/2 point in the discount rate. I’m going to sit this out for now. Trends and momentum are up for the moment, but anything can happen tomorrow, and I don’t have a clue which way it will go. We’ve seen a good rebound already and that may be enough to discount the rate cuts. There could be profit taking after the fact. But then again, trends and momentum are up. When in doubt, sit it out. I will post charts on Tuesday for sure.

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