Fed Day Has Finally Arrived!
By
Mike Paulenoff
Good Wednesday Morning, MPTraders! September 18, 2024-- Pre-Market Update: Fed Day has finally arrived! Let's get on with it already!
FWIW, my instincts tell me that Powell & Company will cut rates by 25 bps and tilt Dovish in its forward guidance rhetoric, but the markets will initially view this as a disappointment compared with growing expectations of a larger 50 bps cut.
It is anyone's guess how the stock and bond markets react, but again, my instincts tell me that the initial reaction to a disappointing 25 bps cut will be an algo-induced knee-jerk response to the downside.
What might that mean? Bottom Line:
ES-- As long as any forthcoming negative reaction is contained above 5650 on a closing basis (see my attached Daily Chart), weakness will NOT inflict meaningful technical damage. As such, the dominant September uptrend will remain intact, heading next to challenge 5800... Last is 5709.50...
TLT (20+ Year T-bond ETF)-- From the perspective of the longer end of the Treasury curve, as long as any forthcoming weakness is contained above or within key support lodged from 98.60 and 100.00, the dominant uptrend in TLT will remain intact, with my next optimal upside target window at 102-103, and an upside outlier of 105-107... Last is 100.27
