Professor’s Comments October 30, 2019

Posted by OMS  at October 30th, 2019

The Fed will be announcing its latest policy on interest rates at 2pm today. A quarter percent decrease in rates is widely expected. Anything less or a change in future interest rate policy could trigger a large move in the markets.

There was another small change in the A-D oscillator last night, which means that there are now two signals on the Board. The two signals increase the probability that the markets will make a Big Move within the next 1-2 days.

I noted that UCO, the Crude Oil ETF, is now at the top of the Dean’s List. TBT, the inverse ETF for Bonds, is also near the top of the List. Seeing TBT on the List tells me that Bonds are weakening and that long term interest rates are moving higher. This is just the opposite what Wall Street is expecting ( and wants) from the Fed today in their lending rate to member banks. So, today’s announcement should be interesting.

With weakening breadth, diverging indicators, and patterns close to levels where a major top can occur, students should pay attention to today’s Fed announcement.

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ

All of the commentary expressed in this site and any attachments are opinions of the author, subject to change, and provided for educational purposes only. Nothing in this commentary or any attachments should be considered as trading advice. Trading any financial instrument is RISKY and may result in loss of capital including loss of principal. Past performance is not indicative of future results. Always understand the RISK before you trade.