Don here...
The Fed delivered exactly what everyone expected today. A 25 basis point rate cut.
Markets celebrated. The Russell exploded higher. Everything seemed perfect.
But something much darker was happening underneath the surface that most traders completely missed.
In today's Live Trading Room session, we tracked the real story as it unfolded in real time. The kind of market action that reveals what's really going on behind the headlines.
When "Good News" Becomes the Setup for Disaster
The Fed cut rates because they're seeing the economy slow. They admitted unemployment risks are rising and growth is decelerating. Yet stocks rallied on this news.
This is the classic trap where markets interpret bad economic news as good news because it means more rate cuts are coming. But here's the problem: quarter-point cuts don't fix structural economic problems.
The session showed exactly why this celebration could be premature and potentially devastating for unprepared traders.
The Hidden Market Warning Nobody's Talking About
While everyone focused on the Fed announcement, we were tracking something far more important: the advance decline line.
We had 90 stocks in the S&P 100 trading higher, yet the overall index was down. This means the market is being held up by fewer and fewer names while the majority of stocks are actually selling off.
This is the exact setup that creates explosive moves to the downside when correlation finally kicks in. The session showed you how to spot these warning signs before they become obvious to everyone else.
Why the Next Move Could Be Massive
The expected move for today was over $50 in the S&P. But even after all the volatility, implied volatility barely budged. This means the market is still pricing in significant moves ahead.
We're sitting at a critical juncture where the next directional move could be much larger than anyone expects. The session revealed exactly what levels to watch and how to position for what comes next.
The Real Inflation Story They Don't Want You to See
While official inflation numbers suggest things are under control, the real data tells a completely different story. Using alternative measures that track what people actually buy, inflation is running at double-digit rates while economic growth slows.
This creates the worst possible combination: stagflation. Higher prices with slower growth. The kind of environment that destroys both stocks and bonds simultaneously.
Stop listening to the headlines and start following the data that actually matters. The session showed you how to separate the signal from the noise and position for what's really happening in this market.
→ Click here to watch the complete Fed day session
To your success,
Don Kaufman
Chief Market Strategist, TheoTrade
0 Response to "Fed Cuts Rates, Markets Celebrate. Here's Why That's Terrifying."
Post a Comment