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When Will The Market Believe the Fed- 22Sep, 2022

Market Outlook – On the hunt for the retest of the lows.

BUT the deep support will bring hope to the forefront – the nature of the human condition is to HOPE. We hope that support holds; and we hope that resistance breaks – this puts our psyches in direct contradiction to market motion. SO EMBRACE THAT – and realize that most of the market does not embrace this and so they will move into areas and get caught by the motion unawares. We are going to watch and move accordingly. That doesn’t mean I won’t be wrong. But it does mean that I will be prepared.

The Fed delivers in the straightforward way it has come to be known and raises 75 bps in the latest release AND says they will raise 75 bps before the midterm election cycle. And in one of the biggest whipsaws I have seen in some time, traders flushed the buyers and the sellers out before settling into a downward flow. The traders are going to eventually drift down but not without hope delivering rallies that will stop everyone out. This is the way the game is played. Our edge is to watch their moves and determine whether we will follow along and leave when they show they are exhausted, or wait for the next move. And that’s where our levels are really showing strength.

Here’s the MotiveWave chart showing the exhaustion at KNOWN resistance and the trend reminding us that bounces will fail – especially as people refuse to believe the FED will continue to tighten

Now, look at the daily candles and notice why I believe we see buyers try to hold the floor here

See the baseline of support to the left

Some information across the wires