19Sep11:03 amEST

It's Not Even Officially Fall Yet...

...and so this fall in TLT may not be official, either, as rates spike and banks in the XLF KRE ETFs catch a strong bid this morning. 

As we know in fixed income, when Treasuries rise in price rates necessarily fall, and vice versa. Hence, with TLT momentarily breaching $117 prior support of a well-defined range, as seen on the daily timeframe, below, financials are understandably gaining traction since they tend to favor higher rates (or at least that is how the market often perceives the case to be, as a knee-jerk reaction). Banks like BAC C JPM are all shooting higher here, as a result. 

However, we would be remiss not to point out that the FOMC one week from today is likely to be the true test as to where rates are headed into the fourth quarter of 2018 and, perhaps, beyond. 

Indeed, the September FOMC, just after autumn officially begins, is as significant as any Fed Meeting we will see into early-2019, regarding monetary policy and the general tone and tenor of the Fedheads. 

Moreover, we know plenty of fund managers are positioned for a spike in rates. And while it is true that the majority can be correct, I suspect we may be ripe to keep some of them honest, first, via a TLT rally after the FOMC next week, since it does seem like an awfully popular trade these days. 

Elsewhere, pot stocks are hot again this morning, with TLRY and CGC the two action names. I have been long GWPH and using strength to trim partial gains, but still favor the weekly chart for a potential fresh breakout when the dust settles. 

Stock Market Recap 09/18/18 ... It's 4:20 Somewhere: Analysi...


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