Weekly Blog - Fed Decision on rates this week - What to expect and Market Action - What to buy/sell?

Fed Decision on rates this week - What to expect and Market Action

The Fed week is finally upon us. What is the Fed going to do - the grind and the news is unstoppable - it is discussed on every financial channel and news and now we have the heads of financial institutions and governments asking the Fed not to raise rates - really, now we need these knee jerk morons who have made a killing in the markets because of bubbles from the Fed's own making and decisions, to ask the Fed not to raise rates. I have never seen moments such as the ones we are seeing now or ever, since I started trading the markets over 20 years ago. This is unprecedented in its nature and irresponsible with even the IMF and EU asking the Fed publicly not to raise rates. Well, with over 5.5M job openings, the lowest rate of labor participation, unemployment rate at 5.1%, and Fed balance sheet at $4T - bubbles in stock markets, real estate - these morons want the Fed not to raise rates!! We think the Fed is in a corner (as we said before) and is scared to even budge on rates. The incessant speculation from the CNBS'ers (on purpose) and the non-stop blabber on Bloomberg is really annoying and frustrating - not a single person really knows what is going to happen - OK, we are going to say rates are not going up this week and the Fed will keep the same language - we may be wrong, but, at least we are not going to be blabbering all day about it. Expect volatility around the bonds, US dollar and gold when the Fed decision is announced.

Ok, let us get to the markets now - what do we expect to happen this week - Markets were up on Friday - as we said the markets have never been down on any 9/11 after the event. We expected that and were prepared for it. We are balanced in our portfolio short and long. We are short some semi stocks and overvalued companies and expect these to still move lower - we closed our AMBA short for a nice tidy profit. We were short AMBA from $115. We still think the stock is headed lower. We closed part of our short in MU, GPRO and shorted FIT.

We are long NFLX and BIDU,CYBR,MBLY. We know these are not exactly what we would like in our portfolio at this juncture - but we hedge these with options. The VIX is still trending down and based on our analysis this week from the markets and stocks on Friday, we expect the markets to head higher into the Fed decision day - very likely it will be volatile due to uncertainty from the Fed. 

Do not forget - this is options expiration week and end of quarter for Calendar Q4 and we will be heading into earnings season for Q3 and expect a bunch of surprises and warnings. We saw several charts that look like good trades heading into the Fed rate decision day on Thursday. Charts that look good on charts are shown here (as much as we hate biotech sector - it did not close below our 50week SMA and is tredning higher for the short term - we are short IBB and will likely have to roll that position out into the Oct expiration). Stocks that are looking good for trading are - AAPL,DIS,MCD,CAH,RH,ILMN,GILD and some other biotech stocks. You can check this report on our Market Reports page - here are the links (you can skim the charts quickly with our mouse-over chart feature):

1. Stocks with Buy signals
2. Stocks which close $2 or higher

Here are some of the charts we like for trading this coming week - 

 

 

 

Good luck trading.

Trucharts Team/Founder/CEO