Will We Hold It Wednesday – Fed Edition

It’s Fed day! 

It’s also Star Wars Day – celebrate what you like.  I can see some future Donald Trump saying “Yes, today is the day we celebrate the great Greg Lukos, who envisioned our great Galactic Empire and I will build a big, beautiful Death Star to wipe out our enemies – especially the ones that are hiding in Congress.  Don’t worry, I’ve made a list of them and we are already negotiating with Russian contractors to build our Death Star, who have promised us the biggest kickbacks – a great deal, to begin work as soon as they have finished counting the votes for our current election.”  

Back to the present.  We got the bounce we expected yesterday, back to the weak bounce line at 4,180 and we’re testing it this morning but there’s nothing impressive about a weak bounce in the same way there’s nothing impressive about a ball bouncing after you drop it.   The bounce is no indication at all that it’s going to go higher – that requires an additional catalyst and the market requires the same thing.

In reality, we are 7.5% below the 200-day moving average than that means that each day we do not improve, the 200-day moving average comse down 0.0375% or 1.68 points.  We are at 4,491 now so tomorrow, unless we have a fantastic day, the 200 dma will be at 4,489.  If we look closely at the chart, we can see the Death Cross occurred at about 4,470 so we have 2 weeks to get back over the 200 dma before very serious technical damage occurs and the 200 dma is in clear decline.  

THAT is how you use a chart!  NOT to GUESS where things might go but to calculate the probability of where the chart will be in the future – so we know what the TA sheeple will “discover” long before they discover it themselves.  Do we have sufficient fuel to push the S&P 7.5% higher to stop the 200 dma from creating a worse chart in the next few weeks?  Earnings have been very iffy so far and keep in mind May 15th is halfway through Q2 and the…

Provided courtesy of Phil’s Stock World.