Why Does The Market Wait For The Federal Reserve?

David Frost // Market Outlook


October 27  

Can’t begin to understand why people wait to hear what the Federal Reserve has to say, especially since they are wrong 80% of the time.

Regardless, they wait with bated breath to see what wisdom the academic central bankers have to disseminate.

What can the Fed do this time around?  They could wind down the latest QE program and finish their tapper, or they could continue buying bonds.

Our of these two options, both are known and either shouldn’t move the markets.  Of course the market normally whips up and down right around the announcement which will be Wednesday at 2:00 PM.

What is the catalyst that would send the market higher?  Europe.  If our friend Mario Draghi is successful in establishing a bond buying program to accomplish the same things we have done here for the last several years, then the market will rally.  (notwithstanding their about 3 years late)

Don’t misunderstand.  This is a program that long term would make things even worse than they are now, but it would kick the famous can across the pond, and down the road farther.

Oil remains under pressure and now investment banks and other pundits are calling for much lower prices.  This should be a sign of a short term bottom.

Even our friend Dennis Gartman called for $10 oil, even though he had a hard time admitting it on TV, but was called out.

Goldman Sachs put a $75 price on Oil today.  This sounds reasonable and most likely will be obtained, but now before higher prices.  Higher prices always come right after the downgrades happen.  That was today.

Gold is under pressure again.  I’m standing firm that gold prices are going lower into next year, maybe after one more short lived rally.

More detailed analysis found in tonight’s video.

About the Author

Trading and investing in markets is second nature to some, but a mystery to others. The goal is to provide a forum where everyday people aspiring to be part time or full time traders will learn how view markets differently and profit beyond their wildest dreams.

David Frost