Hey Folk
I did some forecasting last few post that the Fed wont rise
the rate. Indeed they did not rise. The unemployment is hitting a low, but
there is visibly no inflation. I guess a lot of companies are keeping money in
their stash, not willing to spend.
This move by Fed of no rising the rates ( in my opinion)
also come from international pressure. The world is having ‘QE’ one way of the
other. So having to rise interest rate too fast would not be favorable.
This will also result in the market having lesser urgency to
determine the direction as there are presence of anticipation. However, for the
stock market, base on seasonal is still a down move till October where the up
move will be in. Remember that year ending with 5 is a up year for as long as
the seasonal tendency have exist but maybe this year we will break the pattern.
Well wait and see. Nothing last forever.
Look at the actual data of the unemployment rate in the US.
|
Year
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
|
2005
|
5.3
|
5.4
|
5.2
|
5.2
|
5.1
|
5.0
|
5.0
|
4.9
|
5.0
|
5.0
|
5.0
|
4.9
|
|
2006
|
4.7
|
4.8
|
4.7
|
4.7
|
4.6
|
4.6
|
4.7
|
4.7
|
4.5
|
4.4
|
4.5
|
4.4
|
|
2007
|
4.6
|
4.5
|
4.4
|
4.5
|
4.4
|
4.6
|
4.7
|
4.6
|
4.7
|
4.7
|
4.7
|
5.0
|
|
2008
|
5.0
|
4.9
|
5.1
|
5.0
|
5.4
|
5.6
|
5.8
|
6.1
|
6.1
|
6.5
|
6.8
|
7.3
|
|
2009
|
7.8
|
8.3
|
8.7
|
9.0
|
9.4
|
9.5
|
9.5
|
9.6
|
9.8
|
10.0
|
9.9
|
9.9
|
|
2010
|
9.8
|
9.8
|
9.9
|
9.9
|
9.6
|
9.4
|
9.4
|
9.5
|
9.5
|
9.4
|
9.8
|
9.3
|
|
2011
|
9.2
|
9.0
|
9.0
|
9.1
|
9.0
|
9.1
|
9.0
|
9.0
|
9.0
|
8.8
|
8.6
|
8.5
|
|
2012
|
8.3
|
8.3
|
8.2
|
8.2
|
8.2
|
8.2
|
8.2
|
8.0
|
7.8
|
7.8
|
7.7
|
7.9
|
|
2013
|
8.0
|
7.7
|
7.5
|
7.6
|
7.5
|
7.5
|
7.3
|
7.2
|
7.2
|
7.2
|
7.0
|
6.7
|
|
2014
|
6.6
|
6.7
|
6.6
|
6.2
|
6.3
|
6.1
|
6.2
|
6.1
|
5.9
|
5.7
|
5.8
|
5.6
|
|
2015
|
5.7
|
5.5
|
5.5
|
5.4
|
5.5
|
5.3
|
5.3
|
5.1
|
|
|
|
Table of % of unemployment in US
If you plot them on the graph, since 2010, there is a
consistent drop on the unemployment. However, there is also a consistent drop
in inflation too. The current inflation is at 0.2% now. Fed aim is that
inflation in the long run can maintain at 2%. That is 10 times more than the
current rate of inflation. So hang on tight for this period of time where volatilely
will increase with much anticipation of the rise in rates.
My take is since on the weekly is on the downtrend and the
COT have show negative holding in the big boys, I would be a seller more than a
buyer. However, we are still bounded in a range, so be careful. Not just stock
market. All other instrument like commodities and forex are in the undecided
zone.
cheers
