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March 15, 2017 | Finally, the Fed Has Tamed Our Expectations

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Everything went beautifully for the Fed’s charlatan-in-chief on Wednesday when the central bank announced, right on schedule and exactly as promised, a 25 basis-point increase in the federal funds rate, to 1.00%. Bond price soared, stocks moved higher without the usual wacky gyrations, the dollar took it calmly, and even bullion made nice with an uncharacteristic rally. At long last, it would appear that the investment world has grown comfortable with tightening.  Implicitly, this will remove as a source of worry two more rate hikes promised for 2017.  Only the most churlish contrarian would think to suggest at this moment that the proverbial wall of worry is what has sustained the bull market all along. Against this backdrop, we note that the S&P 500 recently topped two points shy of a major ‘Hidden Pivot’ target had been more than a year in coming. Now, either of two things seems likely to occur: a bear market like no other will commence shortly; or, the S&Ps will blow past the target, inaugurating a new phase of the bull market that will make it even more extraordinary in the annals of stock market history. Dow 25,000, anyone?

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March 15th, 2017

Posted In: Rick's Picks

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