The Fed Delivers for the Markets
By Paul Cherney
The Fed rate cut has negated any need to see excessive put-call ratios to mark a bottom. The bottom is in.
In reviewing the 12 prior times that the Fed has shifted monetary policy by cutting the discount rate, there was only one occasion (in 12) when the S&P 500 was lower at the end of 12 months, and that loss was only 3.3%.
I spoke to S&P Sector Strategist Sam Stovall to find out what sectors have (on average) performed the best during recent Fed easing cycles and he told me Consumer Staples, Tech stocks, and Consumer Cyclicals.
Immediate NASDAQ support is 2546-2488. Resistance begins with prints of 2850 and higher. Resistance is a brick wall (on the first test) at prints of 3,000 and higher.
Cherney is market analyst for Standard & Poor's