Finally We Can Get Them Out Of The Way…For Now… We Think!

December 16,2106
By Gary Kaltbaum
garyk.com
@GaryKaltbaum
Fox News Business Contributor

Fox Business Network will be covering the Fed on Neil Cavuto’s Coast to Coast starting at 12pm all the way into the end of the day. Do not miss a minute.

Coming out of the weekend, we had two overriding market thoughts. The big picture was gross. Last week, the market deteriorated.  But shorter term, we told you markets were again very oversold which can lead to vicious bounces. On Monday, support levels that we told you to watch held intraday, leading the market to reverse up.  This almost always leads to upside testing as market players realize things are sold out on a near term basis. Thus, Tuesday’s gap to the upside.

We now enter fed day. You know by now our feelings toward them and other central banks around the globe. We have kept the same stance forever that they would never raise rates. We stated this both sarcastically and seriously. But this month the rumblings are now much louder. We actually believe there is a much better chance of a hike because the fed has done little to dissuade the huge majority of pundits out every day saying a hike is a lock.

So….

We are told that it is a lock rates will be raised 1/4 point.

We are told that any moves going forward will be slow and data dependent.

We are told if things get into trouble again, not only would they roll any hike back but are considering negative interest rates.

We are told the market almost always goes up when the fed starts raising rates.

We feel better now.

We have a simple theme that has held us in good stead with markets. Instead of predicting, instead of telling you where things will be in a year, we just want to know what markets are doing now and stay just one step ahead or in lockstep.

To be clear, we have no idea what the fed does and we certainly have no idea to the initial reactions to what the fed decides to do. We just know a good many areas of the market remain in poor shape with the major indices holding up much, much better than the average stock. The main areas we are watching right now are the financials,semis and biotech. Financials led down last week and now are leading back  up this week. If they can break out to new highs, it would be a huge help to markets. The semis gave back very little last week and are always on our radar and biotechs may be trying to carve out a low. If all three, can get going again, indices will get going.  Notice the “ifs!”

Futures are up nicely again as rigged Asian markets are ramping overnight and an overall better tone heading into the fed meeting.

Do not forget we are not just at end of month, not just end of quarter but the end of year. Typically, tape painting occurs during these times for obvious reasons. Of course
tape painting is illegal so it does not happen. (sarcasm) It would not be surprising for “the boys” to make their year in the next couple of weeks because of this. It would not be surprising for this to also occur to give the fed cover. Independent our —!

Just don’t blink!