Here’s my take on the current state of the market – September 20, 2023
This is Dan Fitzpatrick with Fitz In Five. I want to go through the major indexes today along with the ETFs ( NYSEARCA: SPY ) and at the same time editorialize.
We got this big kind of gap and crap here ( NYSEARCA: SPY ), but it’s not really big. But the market did open up a bit expecting Jerome Powell’s wisdom from on high. The guy is always a font of knowledge and today was no exception to that.
The Fed did not change rates in September but that is about it. The dot plot, which is essentially, throwing a bunch of BBs on a piece of paper, 19 of them, and that is everybody’s guess as far as where interest rates are going to be in the future. And some of them said, Well, we need to raise them a little bit. Some of them said, We don’t. Nobody said we need to lower them. And a lot of them were saying, We are probably going to hike 2 more next year.
That is all bad, and it is bad for 2 reasons. First of all, nobody really wants higher rates except the Fed. But also, that is the kind of stuff that crashes the economy, when you keep interest rates up too high, this we know. But also, doesn’t it kind of underscore the fact that the Fed has no idea what it’s doing? That it got us into this mess, them and Congress, you can’t just look at Jerome and Janet, though that is a pretty good place to start.
But they got us into this mess and now the messages that we keep getting throughout the months and the quarters over the past year or so, they have always been conflicting. And they have always been, essentially, a big shoulder shrug. Well, we don’t really know for sure, we are trying to give you the sense that we do know, but we actually don’t. Okay fine, that is all I have to say about that.
But here is something else. We are getting this, then we are getting this. Then we are getting what is looking like a lower high. Okay, this is a problem and it will be a real problem if we get a breakdown below here. Because then what’s this looking like? A left shoulder, head, and right shoulder, this is a shoulder-shrugging pattern. This goes down, then this comes up, and then this goes down.
So in my view, what happened today should really kind of scare you, as far as what is going to happen to the market in the near term. Certainly, for the next couple of weeks, I think things are not going to be good. Cash will be great, that should be your largest position if possible beyond margin there. I don’t know how you are going to do that, but sure. Cash should be a big position. You should not be buying stocks that are not above the 50-day moving average and that takes pretty much most of them out of the way. I will just keep going through these ETFs.
The diamonds ( NYSEARCA: DIA ), no. Transportation ( BATS: IYT ), no. QQQ ( NASDAQ: QQQ ), no, ( NYSEARCA: MDY ), no, ( NYSEARCA: IWM ), definitely no. So we look at XLE ( NYSEARCA: XLE ), this is weak just like everything else. Interest rates really aren’t going to impact the price of oil. XLK ( NYSEARCA: XLK ), that stuff, no. IPOs ( NYSEARCA: IPO ), that’s not going to work. The FFTY ( NYSEARCA: FFTY ) is not going to work. ARK ( NYSEARCA: ARKK ) is not going to work, ( NYSEARCA: ARKK ) is definitely not going to work. ARKG ( BATS: ARKG ), that is not going to work. XBI ( NYSEARCA: XBI ), that’s not going to work.
How many things ( NYSEARCA: XLP ) aren’t going to work? Most things ( NYSEARCA: XOP ) aren’t going to work. This is what you have to do then. You need to be picking your positions very, very carefully. I’m sorry, it’s true. You have to be very selective in the positions that you have. And you need to be doing something that Paul Tudor Jones is famous for doing. He gets up every single day, looks at his positions from a fresh set of eyes, and says, “Okay, am I wrong on this position? And if he feels like he is wrong he gets out.
You should be doing the same thing. And probably the only difference between you and Paul Tudor Jones, other than a couple billion bucks, is the fact that Paul can do that without any bias whatsoever, without any ego. He literally looks at his position as opposed to what his prior stance was, and his opinion was on the position.
That’s the way we want to do this. That’s the way I want you to do this. That’s the way we are doing it, by the way, at Stock Market Mentor. I will ditch things in a heartbeat if they are not working. And if they are, I want to stay with them as long as possible.
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