EB Daily Market Report - Wednesday, September 18, 2024

Dear Members.

It's Fed day and so far trader's are taking a cautious approach until the decision is made, including listening to what Fed Chair Jerome Powell has to say during his post decision press conference.

The never ending question of whether the Fed will reduce rates by .25 or .50 will be answered shortly but more importantly we want to see how the market reacts to the decision. The bulls are hoping for a dovish response and to clear yesterday's all time high of 5670. But if that does happen, it will be equally important to see if any gains hold or if a reversal takes place which could be bearish.

To the downside the first key technical level to hold on the S&P will be 5562, the 20 day moving average. If that goes then you can expect some additional selling.

A few things to keep in mind. First, it's triple witching option expiration Friday in a few days and Tom's recent Max Pain analysis shows a bias to the downside. Next, we're getting ready to enter what is historically the worst market period of the year. So even if we do get a knee jerk move to the upside you might want to be ready to move to the sidelines if we see deterioration.

 It's also not uncommon to see a completely different picture the day after a big event like a Fed meeting. So we could see a positive or negative reaction today and see a different reaction come the morning.

Bottomline is this: The Dow and S&P just hit record highs so unless those levels are cleared and gains hold we could be in for a bout of selling. Thus if you tend to the conservative side you might want to reserve more cash until we see exactly how the market responds later today and into tomorrow.

At your service,

John Hopkins