The stock market might do something strange this week. Not crash. Not rally. Strange. The financial press has run out of verbs.
Here's what happened. The Fed made a decision. Any decision. Pick one. Doesn't matter. Now odds of more rate hikes have grown, which is information that changes absolutely nothing about how you should trade but will definitely cause you to trade anyway.
Strange is doing a lot of work in that headline. Could mean anything. Could mean the S&P goes up on bad news. Could mean it goes down on good news. Could mean it trades sideways while CNBC fills eight hours of airtime explaining why sideways is actually the most fascinating direction since someone invented the Z-axis.
The technical picture remains unchanged. Support at levels that have always been support until they weren't. Resistance at levels that will hold until they don't. The 50-day moving average continues its proud tradition of moving and averaging, which tells you precisely nothing about tomorrow but everything about fifty days ago.
Retail traders will read "something strange" and assume they've stumbled onto alpha. They haven't. They've stumbled onto a writer who needed to file 300 words before lunch and decided strange beats specific.
Rate hikes coming or not coming. Both bullish depending on who you ask and what time you ask them. The market could go up because higher rates mean the Fed sees strength. Or down because higher rates mean tighter conditions. Or strange because words have lost all meaning and we're just filling space between pharmaceutical ads.
Check the charts. Price goes right. Sometimes up. Sometimes down. Never strange. That's not a technical term. That's a cry for help from someone who writes about the Fed every single day and has finally broken.
The VIX measures fear. The Fed measures employment and inflation. Nobody measures strange, which is why the market will probably just do what it always does: separate you from your money while you wait for weird.
Photo by Maxim Hopman on Unsplash
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