Taking Stock - Sept 20, 2022

The Indexes stayed close to the neutral point for most of the day, then turned up before 3:00. The SP 500 finished at 3899.99,, less than a point below the late day hi, for a gain of 26.66 [0.69%.]

This week the Fed will have a two day meeting to set policy. Another rate increase of 0.75% or more is expected. This is not surprising, since, as I pointed out on Sept 1, the Fed is far behind the market-set 3 month T-Bill rate. [Link below]

There is no surprise here, so It could be that the anticipated increase is already baked into the market's reaction - if that even matters.

Meanwhile, the Index is hovering near the last reasonable retracement level from the 8/16 hi, coincidentally located in the midst of a broad support/resistance range between 3700 and 3900.

For what it's worth, the day's hi and lo were both marginally above those of Friday's session. You find whatever positives you can.

LINK

Taking Stock

After 4 up days ending in a gain of 5.15%, I was not surprised to see a pull back in the SP500 on Tuesday.  But I was astounded by the magnitude, and then the follow-through.  At Friday's lo, 3837.08, the index was almost 14 points [0.36%] under 3850.76.

This is the .786 retracement level from the 8/16 hi, the last reasonable level to support the current increasingly wobbly bull case.  It's also in the midst of a support/resistence range between 3700 and 3900, dating back to June.

The only slightly bright glimmer I can find is that after hitting the day's lo shortly after noon, the Index rose 36.25 points [0.94%] into the close at 3873.33.  Most of this rise happened after 2:30 p.m.

If the index continues falling next week, then the 6/17 lo is at risk.  Then, if that is breached, The Index could reach as lo as 3200.

Fed, Schmed

It seems the Fed likes to keep the Federal Funds rate slightly above the 3 month T-Bill rate.  

But the FFR almost always follows the T-Bill rate, and almost never leads.  

Right now it is lagging, and that might be why pundits are expecting another .75% increase in September.