The Fed Is “All Over The Place & Just Guessing”

Authored by Peter Tchir via Academy Securities,

Let’s start with the dots.

So year-end 2024 is “only” back to where it was in June and still higher than where it was in March.

If anything, it tells me they are all over the place and just guessing (bit disappointing). 

I do think they DO NOT want a recession in an election year.

That could explain a bit, but the market seemed to get a bit excited by dot plot.

The Press Conference

Maybe, maybe a half-hearted attempt to be concerned about inflation and sound a tiny bit hawkish, but it was small and unconvincing.

I guess that means I should be bullish everything.

I’ve been edging to less bullish and should this be enough to make me more bullish again?

The price action is strong and I’m wondering just how bearish people were? I thought, over the last week or so, people were catching up to this and “being long” was getting crowded.

Apparently not.

If anything, I want to turn short to dead flat.

Cut back on risk, but the price action and the willingness to interpret him as overly dovish, makes me think it is too early to completely pivot.

My much beloved “laggards” are back in the driver’s seat today, leading the way, which is also good and they do at least seem “cheap” relative to some of the other things rallying today!

I guess I plug my, and keep the positioning.

I cannot bring myself to add, I don’t think the Fed was so good for markets, but I do not have the energy, especially late December, to fight this bounce.

FWIW, the zero day to expirations seem to be indicating a potential for a rip into the close!

They do seem to play outsized roles on days like today!

I should re-read my warning in Overstaying Our Welcome?