Early morning futures were not painting a pretty picture to begin the week. Europe was following along with the DAX down more than 2% prior to the US market open. It did not take long before Fed talking heads to begin releasing their dovish rhetoric. Friday’s sell-off was no more as traders cheered the dovish rhetoric. At this point, the market is so fragile to any hint of a rate hike it needs the Fed to remain dovish. At some point we do need a correction and while we are in September it is highly unlikely the Fed moves rates higher. It is clear, one or two days worth of selling is not going to knock this uptrend off its feet. Have a plan and execute.

We doubt we’ll get any further movement out of this market until Wednesday’s release of the latest Fed meeting. August’s job data was certainly weak enough to give an excuse for the Fed to hold off raising rates. With nearly 20T in debt how would the US Treasury handle higher rates? Good lord any serious move in short-term funding would likely cause quite a panic in those trying to fund our current spending levels. In the end, all that really matters is whether or now our holdings continue to push higher. The strong move today certainly gives us an indication there is some sort of floor underneath the market.

The good news is at least there is some volatility back in this market. It was getting quite boring with the tiny moves we were seeing over the last month or so. Our holdings performed well and we did have some nice intraday moves, but overall the market was quite DEAD. Now we have summer in the rearview mirror and a Presidential Election to look forward to. Many are ramping up trading strategies trying to guess who will win and how the market will react. It will be a waste of time for 98% of those who try. Stick with a solid strategy by getting yourself a Big Wave Trading subscription.

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