Fed Speak Could Boost the Rally

Fed Speak Could Boost the Rally

Good Morning:

♂ – Fed Chairman Powell gives his semi-annual testimony to Congress today.

♂ – The market is usually quiet before the speech is published, but the question and answer session might cause a rift, so be careful.

♂ – The Archimedes Algorithm issued a sell signal for the Hourly Strategy mid-day yesterday.

♂ – The Daily Strategy (which has a wider tolerance for volatility) is still in hold mode. 

♂ – We would look to add to the Daily or re-enter the Hourly at the daily mean, depending on the market’s reaction to Powell’s speech. 

♂ – As always, don’t take your advice from a blog but do your homework or take a subscription.

♂ – While it could be my imagination, and it is pure speculation, it seems like the Fed talks dovish between meetings, possibly to keep the stock market afloat or even boost it.

♂ – They lower the boom at the next meeting (about two weeks from now).

♂ – As I counsel from time to time, the path of the stock market is often preordained, which is why it baffles most people.

♂ – Since last October, the market has rallied despite all the bad news.

♂ – To think we would be sitting here with the terminal Fed Funds rate expected to exceed 5% from 0% in a short period with the stock market still rising would have been unthinkable even a year ago.

♂ – After some initial volatility, the stock market will likely resume the rally. After all, what will Powell say?

♂ – Let me paraphrase (before the next meeting) “we think our medicine is working. Inflation seems to be easing, but we will take the incoming data and raise rates to fight inflation until it is licked.”

♂ – At the next meeting, “Inflation has been stubborn, but we will take the incoming data and raise rates to fight inflation until it is licked.”

♂ – After the speech – rally. After the meeting in two weeks, look out below. Anyway, we shall see.

♂ –  Meanwhile, we are finishing the Website programming to convert to the new services announced on March 1st, including the free trial.

♂ – As previously mentioned, I will still publish thoughts here occasionally, just not daily.

♂ –  Premium subscribers, I will be in the Founders Room this morning to interpret the Fed-speak. Make sure your mobile device is configured for text messages.

A.F. Thornton

AF Thornton

Website: https://tradingarchimedes.com

A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.


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