The video in this report is only accessible to members
The video in this report is only accessible to members

The breakdown in US equity prices ahead of a well telegraphed 75 basis-point hike this week doesn’t’ necessarily constitute a chance to buy dips for those who typically expect mean reversion, and price trends remain negative and not oversold.  Interestingly, there has been some minor positive divergence in S&P and NASDAQ futures compared to cash levels ahead of the FOMC meeting, which have managed to hold early September lows and not follow through lower.  However, wave structure and a lack of capitulation still point to a bit more weakness into early October before any real relief.  While parts of Technology such as Tech Hardware and other downtrodden Discretionary groups like Casinos and Cruise-liners have proven resilient in recent sessions, this certainly isn’t enough to go on to expect any type of meaningful reversal.  Any bounce post FOMC likely should still lead to chances to sell for trading purposes, as SPX looks to have a date with 3700 and below in the next couple weeks.  Opportunities to buy shouldn’t materialize until early October, and it’s right to “keep some powder dry” to buy dips.

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10-Year Real Yields have hit the highest levels since 2011  

10-Year yiel...

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