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August 27, 2020 | Traders Freak Out Over…Well, We’re Not Actually Sure

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.

Thursday’s psychotic price action showed what’s on the tiny, fevered brains of traders as they continue to drive the broad averages to ridiculous heights. Supposedly, the wack-jobs wanted Powell to say more than he did in his keynote address Thursday morning at the Jackson Hole conference.  Here’s the Fed chairman in his own words. Judge for yourself whether a more measured response on Wall Street might have been appropriate: “Our longer-run goal continues to be an inflation rate of 2 percent … Our new statement indicates that we will seek to achieve inflation that averages 2 percent over time. Therefore, following periods when inflation has been running below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.”  This is about as dog-bites-man as Fed announcements get, and so we should probably factor out the highs and lows Powell’s words produced on the intraday charts when we calculate targets for the near-to-intermediate-term. They will be rally targets, to  be sure, since there is no evidence that Fed policy, such as it is, has caused investors more than a few nanosecconds of concern.

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August 27th, 2020

Posted In: Rick's Picks

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