Tuesday, October 3, 2023
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Commentary: Paul Ebeling on Wall Street, Special Report

by Paul Ebeling
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#sentiment #stock #market #rally #Fed


“Sentiment is the fuel driving this market” — Paul Ebeling

Most retail investors do not just own the indexes, they own growth stocks, and are married to the 1s that have greatly appreciated in price over the past yr +.  

When those stocks become too crowded the market conveniently destroys those issues.

During the recent decline and the dip Monday, the S&P 500 and NAS Comp found support at their 50-Day MAs. This is a Key area of institutional support, and the large institutions buy near these marks

Last wk our sentiment measures reached extreme Bearish marks. Hence, as a contrarian a Very Bullish near-term indicator.

November, December and January are historically 3 strong months of the yr. Specifically, 2-H of December tends to be strong.

Bottom line

The strong technicals aligned with the positive seasonality and extremely negative sentiment will be the fuel needed for this yr-end rally.

Tune out the Noise!

Many retail investors are concerned that we might see a Y 2018 scenario. Recall that in October Y 2018, Fed Chairman Powell said he planned on raising rates 3 to 4X in the upcoming yr. The market did not like that and corrected 20% in the following few months.

Then in January 2009, Mr. Powell took back his words and that ended the market correction on 23 March 2009. I called in on the minute!

I do not see this happening now because even if the Fed tapers more quickly than expected, they are still nurturing a very low-interest rate and stock-friendly environment.

Stock markets are gearing up for the latest FOMC meeting, which takes place Tuesday and Wednesday

FACT: Chairman Powell never has to raise rates. He can just say that he will, watch the market decline, then turn back to his very dovish self.

Have a prosperous week, Keep the Faith!

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