Central bankers meet Tuesday and Wednesday and will announce their decision on Wednesday afternoon.
I would be very surprised if they decided to raise interest rates before December and I doubt they will even raise at that point; although I wish they would.
Can the Fed prop the market up forever?
I don’t think so. I’m not sure how this can end well considering debt and unfunded liabilities, which are much larger than the published number of 20 trillion.
Let’s take a look at the S&P 500 and recent price action…
S&P 500 Index ETF (SPY) 10 minute
SPY has been trading around the high from May 2015 (red horizontal line) for the past six trading sessions and will likely move significantly after the announcement. See the SPY 10 minute chart to see price action (above).
I don’t think it is prudent to initiate any new trades this week in front of the Fed’s announcement.
A new S&P500 index sector…
On another note, the S&P 500 index has a new sector; real estate. It represents about 3% of the total index. This sector was added last Friday…it was actually taken from the financial sector.
Continue to hold recommended positions.
Trade Smart,
Don Roth