Well, we found out the Fed is not going to raise rates any time soon. The number of Fed Presidents looking for a rate hike will diminish. Price action continues to remain weak and today was further proof this summer will more than likely be challenging. Volume was lower on the session on the exchanges even on a Fed day. The selling intensified at the end of the day and closed near session lows. Not the type of market you want to be fully margined long. This market remains a difficult one to trade. Stick to the process and control your risk.

Banks took the Fed news hard as they will not get higher rates they desperately need. The spread between prime and deposits and without higher rates the spread will remain small. Now we are seeing banks resorting to subprime debt to reach for wider spreads. Of course this is what we saw with the housing market in the 2000s. Will the same fate occur? Who knows, but for now price action is suggesting financials will continue to push lower.

It will be hard to believe the number of bulls jumping week over week on the AAII survey. We simply cannot find any footing despite being oversold. That being said, we are still above the 200 day moving average on the major indexes. The S&P 500 is just below its 50 day moving average. Not all is lost, but we are not looking great. Keep position sizes small and cut losses fast when stocks go against you. Keep it simple.

This is not how bulls wanted the Fed day to go. Let’s