Risk On, Apple Today

FOMC on hold

The rally in equities prompted from both technicals and FOMC fundamentals given yesterdays FOMC on hold decision. JPowell continues to beat the drum that their work isn’t done and we believe he is flat out being honest. As we noted the FRB cannot let the speculators believe that inflation will run rampant so the FRB will continue to remain hawkish. We believe being on hold is the prudent move now considering the rise in yields over the last few months. We know Q4 will not look like Q3 and we have already seen the Atlanta Fed move their GDP expectations lower, now showing a 1.2% GDP for Q4 down over 1% from a week ago! So we know the FRB sees the economy slowing, they will never admit it, they never have, never will and they will be well late in cutting rates in response, but for now the bond and equity markets are taking this as a sign of free risk on as the FRB is on hold for now.

As far as the risk back on, we truly feel that this is nothing more than just a counter trend bear market rally. Maybe Apple continues the party today as expectations are already low, so anything upbeat may continue to push the markets higher. We know the rally here in the SP500 has pushed it back up nearly 200 points off the lows and now running into the first real resistance, the 0.382 Fib longer term:

We have also pushed into the 14960 area in the Nasdaq which put a stop to the last rally attempt off the lows as well. So bulls have their work cut out here to get passed these technical levels but for now, all eyes on Apple: