At Resistance, Alcoa Dumped, But Energy Continues Higher

U.S. stocks climbed after minutes from September’s Federal Reserve meeting indicated the central bank wants to see more inflation before raising interest rates. What a freakin’ surprise.  Yellen remains clueless as always.

Minutes from the Fed’s September meeting showed the fed was uneasy with low inflation., which has been below its 2% target for more than three years. Fed staff estimated inflation wouldn’t hit the 2% goal even by the end of 2018.  How bout’ that?

So what now you ask?  Well the fed wont raise rates this year, this we know for sure, and the likelihood that we will see anything change dramatically short term probably takes the first half of 2106 off the table too. That’s conservative at this rate.

You never know what will come out of right field vis-a’ vis the next black swan, but for now the market has really no headwinds to deal with. Although Washington will probably find a way to screw things up.  Give them time.

Earnings started today, and Alcoa (AA) sucked.  Its not the benchmark it was ten years ago, but it does tell you that global economy is still a wreck.  Energy prices, meaning crude, will need a strong continued rally to save the backsides of many energy companies that cant survive with $40 oil.

The good news is that the dollar should dip lower and that’s good for our multinational companies. Many reside in the S&P and the Dow.  The other positive takeaway is that as bad as things may be globally, the U.S. market may take a leadership role as the best house in a bad neighborhood. Meaning that our tepid 2% growth still better than what’s out there.

As an old man once said, “don’t fight the fed” and I will not.  It will leave you limbless and poor.

The market has seen a nice bounce off the lows and some charts are setting up long again.  It’s still early , but they look better. Hopefully we can get active again soon, so stay tuned.

I drew the chart below last Sunday thinking this may be the target area, well it hit pretty close today, so things may want to take a break or just go sideways for a bit, we’ll just have to see. We are at resistance and we’ve had a good rally.


See you in the morning.



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