Friday, July 22, 2016

Hike... Does Anybody Speak Dolphin? INDEXSP:.INX

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*We wrote that we expect hike commentary to be clear next week at the Fed meeting.
*Ho hum, nobody's listening.
*But the Fed seems to say they'll make it clear.
*We see less support for this market and downside on the way.
*Making things clear means risk.
(Picture: Down... Ready... Set... H I K E. Fed's warming up in the middle of the summer.)
Maybe because it's summer time that nobody is ready for the word "HIKE." The Fed has hinted to us. The jobless claims numbers were good. They go along the lines of the strong economic data that the Fed's looking for. In fact it will be the only real important piece of data ahead of the next FOMC meeting. That said, nobody's listening which sets up a risky market scenario into next week's FOMC meeting.
Let's look at how few people believe the Fed. This is the chart showing the Fed Funds futures not budging to expect a September rate hike.
The above chart prices the futures 100 minus the expected Fed funds rate. Since this week's Wall Street Journal ("WSJ") leak quoting "September" nobody moved. Above is the Fed Funds Futures for September. They are at .4% which is pretty much where rates are right now (between 25-50bp).
Also after the strong jobless claims numbers today, nobody moved.

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS