Rate Cuts v. Market Response
Traders here on Substack have issued some great analysis on the likely effects and market response to Rates Cuts…finally coming true.
I read one very well articulated case for a market rally response by seasoned trader and analyst, IRA ROTH.
I’d simply agree with the “market rallies” case, except that traders have been polling 94% expectation of a rate cut, and markets have already been on the rise for months concurrently with Powell’s persistence in staying to his mandate, rather than succumbing to political pressures.
So, are we factored in here?
Already Factored In ?
The upcoming rate cut may thus far be “factored in” and we’ll get a trader’s nod followed by a “Sell the News” (to retail traders) Scenario. One valid response and change in direction of course can still be CONSOLIDATION sideways. Anybody’s guess. This is my guess.
Technicians Study Effects of Causes
Because technicians study effects of all causes, I’ll offer the following read on the chart above. Price v. Indicator Disagree.
We’ve got Price Highs still creeping happily higher, with Money-flow and Momentum indicators painting highs LOWER, diverging in “disagreement”. And right on queue, the markets issue this tell of divergence at the top of Elliott Wave 5. Wave 5 would be that proverbial END of current uptrend.
Having cited divergence, again one of the possible market responses to divergence is CONSOLIDATION in a broad range sideways. Logically this keeps everybody guessing! Yay.
My 2 cents. — Charlie Whooph