Market Direction Mid Week Update

Market Direction: BULLISH alert issued 6/2/2016

Like celebrities who went to Las Vegas in the 1950s to get quick divorces, the Federal Reserve could be going to Jackson Hole this week to prepare to divorce policy from financial markets.

In a way, the Fed’s relationship with the markets can be boiled down to a simple rule: the U.S. central bank is happy to surprise markets when it is easing policy but has never surprised the market with a rate hike.

But the Fed may be preparing to end this relationship, especially given the recent behavior of financial markets with interest rates so low.

Despite some fairly clear warnings that September is a “live” meeting. the market continues to see only a 24% probability of a rate hike in September, according to the CME’s Fed Watch tool.

New York Fed President William Dudley, San Francisco Fed President John Williams, and Atlanta Fed President Dennis Lockhart have pointed to a possible September move.

Even Fed Vice Chairman Stanley Fischer chimed in with some broadly hawkish comments.
Fed Chairwoman Janet Yellen’s speech on Friday will be the next test of the central bank’s relationship with the markets.

Read: Fed Williams appears to back September rate hike

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The all-time highs since our initial recommendation to go LONG this market. Here is how the markets have performed:

Stock Market Direction Recommendation (6/2/2016)
Dow	up 884.05 points a 4.95% gain	8/15/16
Nasdaq	up 300.00 points a 6.12% gain	8/23/16
S&P 500	up 88.55 points a 4.21% gain	8/15/16

Related Link: http://www.stockmarket-direction.com/