Key Question, did Powell’s Philosophy Change

Powell’s Viewpoint..

We don’t think he has changed his real posture.  There is no way to know for sure, but it would appear probable there is some bad stuff brewing in the macro data that will be seen over the next 6 months.

We still believe Powell is the only adult in the room in Washington.  No doubt he has to tread carefully with all the stupidity out there.

Stopping the Fed Fund rate rise is no surprise to us..

As you know, we said as the fourth quarter of 2018 unfolded, that we thought that would be the end of the interest rate rises because of a number of factors; Tariffs, Brexit, and Trump tax cuts, etc.

The Fed was reluctant to embrace that view for around three months, but now they are on board.

Does that mean stocks can do more than have a rebound?

NO.

For most investors the main point is to be in cash, that has been true since 1/26/18.

If you are traders the S&P today did get up into the top end of the current 2620 – 2720 trading range, in fact we tried to move early to do the final third of our shorts at 2712 but at this moment the market came up a little bit short at 2708.  If it gets filled the original 2512 sell stop for 1/3 of the position will just be a little pudding on the cake if it is filled.