And the Answer is…

The big question before the FED meeting was, what will market interest rates do after the FED does it reduction, whether 25 or 50 points. Here is what we know so far, probably need to check in on this coming Friday’s close for a definitive answer, but so far the (average of the 2yr, 5yr, 10yr, 30yr) was low at 3.613 on Tuesday and since the FED meeting has moved in a range of 3.687 to 3.760 and is 3.719 at this moment.

My take, we have two groups of smarty pants out there, the over 60 economists who are looking for a recession and under 60 traders who want to push for new highs on the S&P. Neither group is going to happy in the next three months by my reckoning. Investors are going to need to trade out of this log jam with a mix of sectors and alternating long / short postures.

Valuation Measure.

(Don this is the chart we discussed over the phone)

We are showing here one component of our Model. It incorporates the dollar, 2yr rate, 30-05 YC, gold, and oil, and obviously stock prices. Here are the weekly chart time frames:

1) Extreme Over valuation 11/9/20 to 1/3/22 2)

2)Over valuation & declining 1/4/22 to 2/7/22

3) Under valuation 2/8/22 to 4/11/22

4) Extreme under valuation 4/12/22 to 10/23/23

5) Under valuation & rising 10/24/23 to 6/24/24

6) Over valuation & rising 7/1/24 to 9/18/24

7) Extreme over valuation 9/19/24