Wednesday, October 28, 2015

Fed: See you in 2016

The Federal Reserve might as well take a vacation till March.  They will do nothing for the rest of 2015, and depending on the stock market, could do nothing in 2016.  All that rate hike talk went down the toilet with one weak jobs report and a little scare in the stock market.  Sure, we had below expectations economic data, but if they are expecting hot economic data after 6 years of an economic expansion, they will never raise.  They are always too optimistic in their projections and always lie about inflation.  This gives them excuses to always do the easy thing: please the market.

I wouldn't short into the Fed meeting, because for some idiotic reason, people still think Fed will raise rates or say they will raise rates.  And they get surprised when the Fed is dovish.   Expectations are for the Fed to do nothing, so I don't expect a big move afterwards.  But still, if they will surprise the market, it will be to the overly dovish side, of course.

Thinking about shorting on any post FOMC euphoria, but its not that good of an opportunity.  The market is close to equilibrium, the predictable portion of the migration is complete, and any moves too far up or down should not last long.

9 comments:

Anonymous said...

Nat gas in the hole again. There's got to be a dead cat down here.

Market Owl said...

Nat gas at this level will bring lots of coal to gas power switching in the coming weeks. These levels are not sustainable for long. And winter is still ahead, anything can happen with the weather. This El Nino hype is everywhere.

Anonymous said...

Yeah that's why I picked up 10K shares of UGAZ. Let's see what happens. GPRO coming out with earnings after the bell.

Market Owl said...

You still long those VXX calls? Stocks really resilient.

Anonymous said...

No I sold on Monday, market didn't look that weak.

Sam Kang said...

What's your new target to short the SPX?

Market Owl said...

Probably SPX 2095-2100. Not that good of an opportunity. I would rather short oil at 47 than SPX at 2100.

Anonymous said...

Feel like SPY can test down to 206 on a consolidation before going higher. Or full on leg down to 204 or lower. Long UVXY.

Market Owl said...

Yeah, market looks tired here. Looking for SPX to get to 2060 sometime next week