SCT Issue #253
Markets are getting more and more anxious over the Fed’s decision later this month whether or not to raise rates. The markets are also getting very nervous over tomorrow’s employment data. Asia is mostly closed for Chinese and Hong Kong holidays, so the lack of liquidity in Asia right now is also wearing on big traders’ nerves.
Nonetheless, the major trends remain intact. We have seen the Dow rally a bit stronger than I expected and gold and natural gas pulling back a tad more than expected.
But I recommend holding ALL positions with their related protective sell stops in place.
I am watching the markets very closely and if anything needs to be changed, or if I have a new recommendation, you will be the first to hear of it. Right now there’s simply too much “noise” in the markets.
Mario Draghi, head of the European Central Bank (ECB), kept rates unchanged at today’s ECB meeting and in a press release this morning, Draghi commented that Europe’s recovery is slower than he expected.
I don’t know what he was expecting, but my words for him are simple and straightforward: Expect a collapse in the weeks and months ahead, not a recovery.
This morning’s U.S. unemployment claims came in a tad higher, at 282,000 versus expectations of 273,000. Not a big difference, but we do know the Fed is closely watching every stat now.
In addition, overnight the International Monetary Fund (IMF) implored the Fed, again, to not raise rates. I agree with the IMF. Raising rates now will simply put the dollar in a rocket ride higher, squashing the U.S. economy and causing debt implosions overseas, sooner than expected.
My forecast is that the Fed holds off, but raises rates either in December or early next year. We’ll see. No matter what the Fed does, it won’t alter the trends. It can merely affect their amplitude (strength) and volatility.
Best wishes and stay tuned …
Larry
Position Tracker
Click here, or on the image below, to view our position tracker in .pdf format.
