Keep Your Eyes On The Fed

The SPX may be in a sideways pattern, but the short-term momentum has shifted to the positive. Now all the analysts come out of the woodwork to try and explain why. Here’s the simple thing to do:

Watch the Fed.

If the news cycle isn’t going to change what they’re doing, odds are, the market shakes it off in short order and resumes its current trend.

This trend is not on fire. It is not likely to spike higher in the near future. No, it’s likely to keep grinding higher and higher — likely to and through all-time-highs — as the year moves on toward 2020.

Why? Because the macro story is unchanged. And we’ve beaten the drum enough — still in expansion, growth slowing, international growth slower than US growth, international rates negative, US rates ultra-low. All of this still forces money into the more conservative pockets of the US stock market – which creates a bid that keeps things from breaking down too quickly.

It’s still a TINA story — there is no alternative — and until we have a reason to change, we’ll press on.

Look for the SPX to challenge — and likely close above — the 3000 level for the week. Support is at the 100-day moving average around 2915. Any trading above this range is simply… ‘normal.’


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