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Welcome and thank you for visiting!

The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* In answer to this often-asked question, please be advised that I do not post articles from other writers on my site.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...please read my full Disclaimer at this link.

Dots

* If the dots don't connect, gather more dots until they do...or, just follow the $$$...

Paris Cafe

Paris Cafe

ECONOMIC EVENTS

 UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...

* Wed. May 25 @ 2:00 pm ET - FOMC Meeting Minutes
* Wed. June 1 @ 2:00 pm ET - Beige Book Report
* Fri. June 3 @ 8:30 am ET - Employment Data
* Wed. June 15 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Wed. July 27 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Wed. Sept. 21 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Wed. Nov. 2 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Wed. Dec. 14 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference

*** CLICK HERE for link to Economic Calendars for all upcoming events.

Monday, January 24, 2022

Volatility Bites U.S. Markets...But, Should It Bite The Fed?

* See UPDATES below...

The SPX had a wild ride today, with an intraday trading range of 194.7 points, complete with a gap down on the open, followed by a huge drop lower, and finally followed by a massive rally to close the day a bit higher than Friday's close, as shown on the following daily chart.

This volatile action triggered some interesting tweets...

...and has created an "interesting" dilemma for the Federal Reserve to digest as they examine their next moves at their upcoming meeting this Wednesday.

However, I can't see this influencing their dual mandate to maintain a 2.0% inflation target and stable prices (the U.S. inflation rate is already well above at 7.0% with no signs of abating) and to promote maximum employment (the current unemployment rate is 3.9%). 

Their current interest rate is 0.25% and is not a deterrent to curb out-of-control inflation.

If today's intraday volatility does unduly influence them, they're not performing (what should be) their impartial job of properly managing their dual mandate, in my opinion.

* UPDATE January 26...

The Fed has failed to carry out their dual mandate, once again...inflation will continue to rage.

Not hiking interest rates now is foolish and signals to investors and the rest of the world that the U.S. economy is too weak to withstand higher rates

Therefore, this does NOT justify higher equity prices, in my opinion

They will have to revert to drastic measures soon to make any meaningful dent in out-of-control inflation, because they've waited far too long. They should have stopped their bond-buying spree and begun to raise rates months ago.


Morning comments made prior to the FOMC statement indicate a growing concern over the Fed's lack of leadership in calming inflation...President Biden has already thrown Chairman Powell under the bus on this issue.

However, the President is not without blame in contributing to inflation. He needs to:

  • REVERSE his executive actions when he (1) restricted oil and gas exploration and drilling on federal lands and imposed further regulations on that industry, and (2) withdrew the approval of the Keystone XL pipeline from Canada...those two actions on Day One of his presidency triggered and contributed to the inflation spike.
  • STOP paying people to stay home and to get back to work.
  • STOP flooding the economy with fiscal stimulus programs and exploding the national debt (now at $29.88 Trillion).
  • START implementing policies that tighten national security, rather than continue with those that are weakening it...e.g., resume building the southern border wall and enforce existing immigration laws.

Both men need to start doing their jobs properly...otherwise, a GOP majority win in both the House and Senate is guaranteed in the November mid-term election

However, with Biden's overall approval rating already in the 30's because of his reckless actions (Afghanistan), and his radical socialist policies and agenda, a massive GOP win is likely to occur, anyway.



* UPDATE January 27...

It seems as though it doesn't really matter to Chairman Powell that inflation is hitting lower-income people hard...so, who's looking out for them and, really, what use is the Fed? 😕

Expect:

  • the market chaos to continue,
  • the lower class continue to suffer under crushing inflation,
  • the Misery Index continue to rise, as described in my post of January 26,
  • while the Fed and the President "fiddle and fluff over" the harsh results/realities of their actions/inactions.