Fed Sticks To The Script, But Markets Still Head South
[Chart courtesy of MarketWatch.com]
- Moving the market
The market spent most of the day fixated on the Fed, and in the end, Chair Powell & Co. stuck to the script with a quarter-point rate hike.
That outcome may not have been exciting, but it removed the risk of a surprise, which is usually a good thing because Wall Street tends to react to surprises the way cats react to vacuum cleaners.
Even so, traders weren’t exactly in a buying mood. Stocks faded after the announcement, bonds sold off, and yields moved higher as the dollar climbed to a one-month high.
On the bright side, oil also headed lower, providing at least a little relief after diesel prices topped $6 a gallon and crude spent time above $100 a barrel.
The Fed’s message was pretty clear: inflation remains the main concern, while worries about rising unemployment appear to be taking a back seat for now.
The real question is whether today’s move was a one-and-done adjustment or the first step in a new tightening cycle.
What will traders focus on next: inflation, growth, or the path of future rate hikes?
2. Current domestic “Buy” Cycle (effective 5/20/2025); International “Buy” Cycle (effective 5/8/25)
Our domestic bullish cycle that began on November 21, 2023, concluded on April 3, 2025, following a market downturn triggered by President Trump’s tariff policy announcement.
This development caused significant declines across major indexes and broader market indices. However, markets subsequently rebounded, culminating in a new domestic “Buy” signal taking effect May 20, 2025.
Concurrently, our International Trend Tracking Index (TTI) experienced parallel volatility. On April 4, 2025, it breached critical thresholds, prompting a “Sell” recommendation. This position reversed as global markets recovered, with the International TTI regaining sufficient momentum to issue a new “Buy” signal effective May 8, 2025.
3. Trend Tracking Indexes (TTIs)
The Fed meeting came and went pretty much as advertised, with a quarter-point rate hike and no real surprises.
Markets, however, seemed to follow the old “buy the rumor, sell the news” playbook. The S&P 500 and Nasdaq started the day with some optimism but couldn’t hang onto their gains, while the Dow spent the entire session sulking in the red.
The metals market wasn’t in the mood to celebrate either, giving back its early advances as the day wore on.
Our TTIs followed suit, drifting lower alongside the broader market. All in all, it was one of those sessions where investors showed up looking for fireworks and got a sparkler instead.
This is how we closed 09/16/2026:
Domestic TTI: +3.83% above its M/A (prior close +4.66%)—Buy signal effective 5/20/25.
International TTI: +4.32% above its M/A (prior close +4.93%)—Buy signal effective 5/8/25.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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