With another Iran deadline looming tomorrow, the only question that remains is whether U.S. assets are ready for a ground invasion. If not, I would guess we get another 1-2 week extension.
@PurpleDrink_LLC If we punch up to new ATH’s, but the mags don’t join, isn’t that divergence common before decent sized corrections? Usually from rotation to more “defensive” and undervalued plays?
@OddStats There could be a dip mid week when the FOMC keeps rates locked or raises, only to fake out bottom Thursday and Friday pop.
How do the returns look for each day of the week?
@McClellanOsc@hectorchamizo Tom have you noticed that there’s usually a divergence of the EFFR. When it drops and the market goes higher, it usually leads to greater market weakness and more cuts? Same thing happens when rates hike and the market corrects, usually a divergence leads to market strength.
@acemoney21@OnodaCapital Cuts only come if the economy is truly broken, like demand destruction cuz of the war, high unemployment rates, lack of velocity in the movement of money, etc
So flat or a hike would be best for getting back to ATH. Cutting when the supply isn’t there is not smart.
@paxtrader777 Well, could be demand destruction. Check out this chart. EFFR cuts tend to lead to greater cuts and greater SPX corrections.
A hike in rates might actually be bullish, as the last time a hike happened after a cut was in 1998z
@Mr_Derivatives The Chinese have been driving the gold price. The Chinese are not buying again until geopolitical risks are stabilized, which includes energy and food security.
@PeterSchiff Right Pete, and instead of spending that liquidity on gold, like the Chinese were doing, they are spending that money on higher energy prices, and holding back that liquidity in case of a “rainy day”. Currency wars are put on hold when food, energy, and defense take priority.
The Effective Federal Funds Rate is down 1.5% from its peak in Aug of 24
There’s never been a time over the past 30 years where the EFFR has lowered that didn’t lead to greater cuts and a serious SPX correction. The only time rates have been cut and then re-raised was Sept of 98
@PeterSchiff Not really. The liquidity that was flowing into gold, bitcoin, and risk assets is now being sucked into higher energy costs and all the things that are shipped by them.