The critical week is here. The Fed is about to make their announcement this week. A announcement everyone has been waiting for and have been speculating on what they will do.
Last month, the Fed “satisfied” the bulls during their announcement which indicates that they will probably due the same. If they cut rates, how much they cute them, etc, they probably will use “bullish” words in order satisfy the bulls. If you don’t think so then why was Fed announcement and White House comments last month on the same day. Remember, next year is an election year.
Last week, the market went up on low volume. Why did it go up? What was the news that led it to go up? Who is buying? Would you when last month, the entire world-wide Fed’s pumped billions into the market to kick start the entire financial market? Would you buy when hedge funds declared billions in dollars of funds lost? Would you buy knowing that many people are in financial trouble when they are over leverage in house payments?
If you look at W.D. Gann work, you will know that recessions start with years that end with 7. Also, here is another statement from Gann “September 23rd is 93 days from June 22nd, but the Earth or Sun has only traveled 90 degree. The Sun crosses the equator at this time and is 180 degree or opposite the point where it crosses the Equator on march 21st. Fall begins at this date, and stocks make important changes in trend.” W.D. Gann is the most successful trader of all time. He was able to predict market high/low with consistency.
Let’s look at the seasonal charts and see what we see:
The seasonal chart (not predictive of future results) for SPY shows that the seasonal turn date is 9/18 (+-3 days).
All seasonal charts for the various sectors that make up the S&P show the market is suppose to go down 9/18. Now what? Have you ever seen where 2 weeks before a stock earnings is announced, the stock goes up. During the day of announcement, the stock goes down even though they beat estimates. Well, my guess is the market is going up on the expectation that Fed will cut rates. I believe after Fed announces, the market will go down. It may go own Tuesday or may go down after Friday (when the quarter ends for all financial institutions).
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Futures/Index/Ichimoku: S&P Mini-Futures/SPX: 7-16-07: Market Review