THE SPY is FALLING! Again! Near All-Time Highs
While we are not making light of the overnight pop in Treasury Yields, or the pre-market weakness in the S&P 500, it is a little early to cry “The SPY is Falling!” A little context for discussion follows in this post. We are not making a prediction, rather we are just looking at FEDRATES.
Fed Rates – 2007 “Financial Crisis”
The Fed rates going into the 2007 “Financial Crisis” peaked prior to the collapse in the markets several months later on October 9. We all know the FED rate continued to drop.
Fed Rates – 2007 through 2018
“In a widely expected move, the Federal Reserve announced its decision to raise interest rates by 25 basis points on Wednesday. The Fed decided to raise the target range for the federal funds rate to 2 to 2.25 percent, citing realized and expected labor market conditions and inflation.” Sep 26, 2018 RTTNews.com
A sudden increase would be our concern. Keeping things in context, we’d anticipate the increase in rates merely confirms what we already know. The U.S. is expanding and as expected the FED is gradually raising rates towards “normalization.”
Does this mean the SPY is Falling? On a short-term basis, we’d likely see a little selling. Given the seasonality into the Fall, however, we are looking for opportunities on any dips.
Futures are lower this morning.
The Dow Industrials are bullish. Look for dip buying opportunities against rising moving averages.
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Below: Remember the last time the SPY was Falling?
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