Online Stock Trading | Can charts forecast the FOMC move?

Can charts forecast the FOMC move?


Filed Under Fundamentals & Charts |

I do not believe the FOMC should cut the target rate, a further cut in the discount rate is needed.  As you might know my opinion means nothing to big Ben and company.  There is a certain level of certainty that the FOMC will move to cut the target rate by 25bps.  In some camps, there is talk that there needs to be at least a 50bps cut.  I expect to see at least some rate being cut tomorrow, whether it be the target and/or discount rate. 

Moving onto the charts….

GOLD.png

SILVER.png

USD_Index.png

The USD index has made an interesting move over the past few trading sessions.  One would have thought with the FOMC easing, releasing more dollars into the market the dollar would continue its slide.  However, we have seen the opposite move.  Is it contradicting the move in Gold and Silver?  A possibility, but we can’t assume the either one is disproving the other.  The dollar remains in an ugly downtrend.  It would take moving a mountain to reverse the current trend.  Gold remains in an uptrend while silver is undecided at this point, but its in a very short-term uptrend.

2pm EST will be interesting to watch…action will most likely be in a stand still from 2-215 then at the release of the policy statement look out!  Expect some volitility!

Market Speculator

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Comments

2 Responses to “Can charts forecast the FOMC move?”

  1. Aaron on September 18th, 2007 12:28 am

    I am somewhat skeptical of the ability of the USD to foreshadow what the Fed will do. The USD has been down so much, it was due for a bounce I think. The market is expecting a lot out of the Fed tommorrow, which has me a little worried. I wrote about this tonight as well:

    http://www.growyourfunds.com/2007/09/what_does_the_market_expect_fr.html

  2. Market Speculator on September 18th, 2007 8:37 am

    You should be skeptical, but you have to review information from all sources. This past week was an indication that no one had a strong feeling of what the FOMC will actually do…most expect 25bps but it didn’t look, volume wise anyone was willing to make large bets.

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