Classic move on Fed Day:
Thanks kris, especially for starting a new thread!!
he Federal Reserve announced that it’s keeping interest rates steady following its Nov. 2-3 meeting, leaving the federal funds rate at a range of 0 to 0.25 percent. This follows the Fed’s decision to hold rates near zero until the economy has fully weathered the effects of the coronavirus.
The move was widely expected, and it comes as the U.S. economy continues to bounce back, thanks to vaccinations and trillions in fiscal stimulus. Federal Reserve Chairman Jerome Powell has said that accommodative monetary policy will continue. However, the Fed did make a significant move, deciding to taper its purchases of bonds. The move will gradually reduce liquidity in the financial system as the debt market stabilizes..
Greg McBride, CFA, Bankrate chief financial analyst, expects that tapering will occur “at a pace that will get them done with bond buying by the middle of next year. The Fed has been clear that future interest rate hikes won’t come before the tapering is complete. First things first.”
Some Fed watchers are concerned that, if the central bank keeps its foot on the gas too long, it could exacerbate, and maybe even entrench, already-high inflation.
For now, however, the bond market doesn’t seem to be pricing in a huge incremental rise in inflation. After soaring in the first few months of 2021, U.S. 10-year Treasury yields retraced about half their gain, but they’ve solidified in recent weeks.
As the Fed continues to sit tight on rates, here are the winners and losers from the latest decision.
See the rest of the article at the link above!
This has been some kind of a rally! How long can it last?
Thanks Kris for your posts.
You are most welcome gentlemen.
How long will it last? Don't know and don't care really, we'll see it when it happens I'm sure ;-)
I have a resistance level @ 4680 short term then 4711, these levels are tentative and are moving targets as the action unfolds I may need to adjust (or not).
Longer term I believe we'll reach 4940
Today's chart: after the morning dip into the fibonacci pivot we had a 200 ABC extension followed by another dip into the 786 retrace level for the session, revisited the 786 level on four different occasions then moved higher into a marginally higher high for the day:
The resistance @ 4711 I mentioned yesterday came into play shortly after the day session opened.
We had a couple of retracements from that level at 786 (not clear on this 15 min chart but clearly visible on the 1 and 5 min) after the initial drop but then things got serious.
We declined from the early ABC high into the terminal 423.6 extension down.
Reaction ensued and we recovered to where 3 fibo numbers came into place, a 200 extension from the ABC low and two retracements at .707 & .786 from previous highs.
Along with those 3 fibo levels we had a perfect high to low 1.618 extension in time:
Back to the daily chart and more reasons as to why I considered the 4711 level a resistance point:
The structure outlined in the daily may or may not be correct (I am not an E-waver by any stretch of the imagination but I do look for 3 or 5 wave moves).
Consider: from the 1 and 2 wave ABC low we terminated exactly at the terminal 423.6 extension at 4710.72, consider also that the length of wave 1 is exactly the same as what I have as a 4 wave low to the top at 4711. Note as well that it took wave 4 more time to go the same length: 5 days for wave 1 vs 8 days for wave 4 [dang those fibo numbers ;-) ]
We may or may not see some down moves from this point, we'll stay tuned ... !
Thank you very much!!
Looks interesting. Could also be wave three of five making the bigger wave 3? I'm not an expert.
What has kept me in is the realization that the standard of measurement has been changing so fast. It seems that the people in power want to destroy the currency. And, the Fed chair talks taper, and the 30 year bond is up over 1 1/2 points - they don't believe a word he says, do they? Everyone knows that the Fed has painted itself into a corner and at some point it is going to get really messy. But no one wants to initiate that necessary move. At some point we should expect another Paul Volcker - but not until all other actions have been exhausted?
And then there is this:
For some reason, the rest of the world doesn't have a lot of respect for our president. Definitely worse than Jimmy Carter.
What happens if faith in government bonds evaporates? Where would the money flow to?
"Looks interesting. Could also be wave three of five making the bigger wave 3? I'm not an expert"
I am no expert either and what your stating as far as wave structure goes could very well be it.
All I care about is price, price is the ultimate and only indicator imho.
Through price movement we can speculate about wave structure though and find a nugget here and there on occasion ....
find a nugget here and there on occasion
Yes, patience is the key - and waiting for the times that the money is just sitting on the table ready to be picked up is the difficult part.
I visited with the man who founded Bowfort Technologies and asked him which indicator he found most useful in Wards Systems Neuroshell Trader. He said this one was:
From what I know, it looks for wave patterns in historical data that are similar to the current ones. These then can be used as inputs to a trading model to give some quantified probabilities of market moves. I haven't yet tried this, but it still looks interesting to me - adapting the wave study to specific markets. I've always hesitated due to concentrating on commodity futures, but I'm guessing the cash markets might be useful. Maybe it's time to download it and try - have you had any experience in quantifying wave analysis?
This could get interesting.
After the afternoon open: we hade a 618 retrace from Friday's afternoon high paired with a 1.618 ABC low extension (not visible on this 15 min chart but clear on the 1 & 5 min)
This may or may not morph in a Wave 3 down, if it does we may see plenty more downside ...
"I visited with the man who founded Bowfort Technologies and asked him which indicator he found most useful in Wards Systems Neuroshell Trader. He said this one was:
From what I know, it looks for wave patterns in historical data that are similar to the current ones. These then can be used as inputs to a trading model to give some quantified probabilities of market moves. I haven't yet tried this, but it still looks interesting to me - adapting the wave study to specific markets. I've always hesitated due to concentrating on commodity futures, but I'm guessing the cash markets might be useful. Maybe it's time to download it and try - have you had any experience in quantifying wave analysis?"
I did pay them a brief visit out of curiosity but frankly: I don't have much interest, E-wave may work for some and that's great. For me there are to many variables/possibilities/resets/recounts etcetera that I do not want to get into.
I try to keep things simple and precise. Don't care what wave we're in but as can be ascertained by looking at my charts posted: yes I do look for structure: 1-2-3, ABC, 1-2-3-4-5 but not much else.
There are a gazillion indicators/systems out there and many more "new and improved" indicators/systems [just like laundry soap ;-) ]
My sole indicator is price.
The market is at an important juncture here: we are at a 786 retrace from the 11/09 high and a .707 retracement from the all time high (along with a few important extension levels from the ABC lows on 11/11)
IF, which is a big IF, we are to start a wave 3 down or an AB/CD correction this would be the spot imho.