Written by A.J. Brown

Stocks on the Rebound

leverage.jpgToday the market was up quite a bit. At one point, the DOW was up over 600 points from its session low, which is a huge move. It finally closed up 298 points.

Yesterday I wrote that our normal trading rules would be on "pause" until the market digested the Fed’s surprise rate cut on Tuesday. Now you know why.

Here’s the thing. Oftentimes, the market responds to what the Federal Reserve does rather than the actual fundamentals that are moving the market. Today’s move is an optimistic one; many people think the Fed’s rate cut will somehow fix the economy. But that’s not generally what rate cuts do.

Rate cuts inspire confidence. And so the market showed some confidence today. Just how long will that confidence last? That is the question.

Always remember: fundamentals drive the market over the long-term; but fear and greed drive short-term fluctuations. That’s what we saw today.

Best Regards Always,

A.J. Brown

Categories: News

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