Market After The Close, Tuesday 17 December

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Farewell, 2%, We Knew You Well

by Alex King, CEO, Cestrian Capital Research, Inc

As everybody knows, the Fed has given up on any pretense of 2% inflation. At least, that’s if you believe that the coming couple years are going to be inflationary. Obviously they should be inflationary, because tariffs and because rate cuts, but who really knows? Since when did macroeconomics make for a linear science? I think the jury is out right now. Oil and energy stocks are positioning as if we are going to see an uptick in inflation (which would normally benefit the sector), but bonds are setting up as if a drop in inflation is coming (which would normally benefit the sector). Equities are just drunk on moonshine-brewed hopium (I am not complaining by the way, the stonks have been very good to me) and are too fickle to be trusted as any kind of divining rod. So my professional opinion is, I Dunno, and I shall continue to just follow the charts rather than the narrative in my head.

FOMC tomorrow with all that brings. Wild swings all day with market makers hunting every sensible person’s stop-loss orders. Short term moonage to take out short-stops and then equal doomage to take out long-stops. And then the markets will set off in the direction that the Masters of the Universe already intended. FOMC days are hard to call. If you want to minimize your blood pressure you can just hedge out 1:1 long:short (we teach you how to do this in our Inner Circle service) and wait to see what happens. Or you can go full Green Beret into the fray and parry the blows as they come for you. Or you can go play golf and take a look a couple days later then decide what to do. All these methods can work perfectly well by the way. You just need to have a plan and pre-program your emotions and actions for what to do when that plan gets punched in the face and then stomped on when down on the ground. Which is to say your normal kind of FOMC day.

Let’s get to work. But before we do, it would be rude not to ask you to join our tippermost-toppermost subscription service, Cestrian Inner Circle. Click here. Independent Investor and Investment Professional pricing tiers available.

Short- And Medium-Term Market Analysis

Don’t forget that to open full page versions of any of the charts below you can just click on the underlined header which titles each chart - they are all hyperlinks.