Daily Commentary: September 13, 2024

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Rumors Of A 50 Basis Point Rate Cut

Posted by Pete Stolcers on September 13
www.oneoption.com

According to the Wall Street Journal, some former Fed officials are favoring a 50 basis point rate cut next week.

PRE-OPEN MARKET COMMENTS FRIDAY – The market erased all of the losses from last Friday’s soft jobs report and it is within striking distance of the all-time high. All eyes are focused on the FOMC statement next week.

According to a WSJ article, Nick Timiraos (known to be a Fed leaker) quoted that several former Fed officials (Jon Faust, William Dudley, Donald Kohn and Esther George) think the Fed should start at a 50 basis point rate cut. This was released at 12:50 ET yesterday and that is when the market lifted off.

I’m not going to read too much into this since they are not current Fed members. I also question whether a 50 basis point rate cut would actually be well received. This could be a shock. “Why is the Fed so aggressive? What do they know that we don’t know?”

The bounce during the last week has been strong. I would go with that current momentum, but don’t get locked in. There has been plenty of volatility this week so there are many opportunities on both sides.

I would keep swing trading to a minimum until we breakout to a new all-time high or we break below the 100-day MA.

Support is at the 50-day MA and resistance is at the all-time high.

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