📈 Rip or Recession?

The first move after rate cuts tell the story.

Critical Month for Stocks

We are in the midst of one of the most important times for stocks in a long time.

We first cut rates on September 18th - so it has been a little over two weeks. Thus far, the move that the market has made since cutting rates has been positive.

The SPY is making all-time closing highs. The Nasdaq looks to be turning up and ready to challenge highs for the first time in a while. Things are looking bullish.

The action that we see over the next few weeks is going to be extremely important for this reason:

The chart above tells us that following rate cuts, the market can go one of two ways. We can see economic growth as planned or we an spiral into a recession.

The last eight times we have had rate cuts, the first two months have told the story of which way the market would move over the next year.

Therefore, if continue to see the market push higher, one can have a reasonable expectation for the market to sustain a move in that direction.

On the other hand, if we see extremely bearish action and the market responds poorly to rate cuts, there is a decent chance that we move towards a recession and stocks fall.

Understanding this information will put you ahead of most traders in the market.

Let’s hope we continue to see market strength! I walk through the research behind this in the video below: