The stock market went up yesterday initially after the Federal Reserve released its policy statement in regard to interest and so did the price of gold.
I was actually watching CNBC and saw some of the people on there get exicted about the move, but then by the close the stock market dumped and there was a headline on their website saying that Jerome Powell said a word that made the market fall.
That word was “transitory” in describing what is a lack of inflation in the US economy – at least below the Fed’s 2% target rate. The inflation is being used to justify a coming interest rate cut, but Powell said it might only be a temporary problem.
But Powell said that he would cut if needed. The reality is that the stock market was so overbought going into the meeting, with the Nasdaq RSI going above 70 a few days ago, that it could have sold the meeting
You can see the overbought condition of the S&P 500 in this chart.
Is it time then to sell in May and go away?
Well support on the S&P 500 is now at 2850 so if the market were to dip this month that is where it would likely find a bottom at.
The only people who would need to worry about a dip of that size are those that have gone nuts going on margin for leverage or using the crazy triple ETF’s.
As for me I use a rebalancing money management strategy and actually added a little bit to a position I’m building in something super oversold that has been dipping for the past few weeks, but actually closed up yesterday.
So I bought something and didn’t sell anything myself yesterday.
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