Morning Comment: The Fed is Scared....Can the SMH Breakout?


  • The Fed's Williams walked back his extremely dovish tone, but.....
  • What does the Fed know that the rest of us don't know?
  • "Insurance" rate cuts have an uneven record of success.
  • That said...the chip stocks act well...which is certainly positive.
  • In other words, investors will NEED to stay nimble going forward.


NY Fed President Williams tries to say, "Never mind."

New York Fed President Williams made some very dovish comments mid-afternoon yesterday…and this led to a nice bounce in the stock market. It also helped fuel and drop in the dollar and a decline in interest rates. However, Mr. Williams and a NY Fed spokesman walked-back those comments after the close of the market, so it wouldn’t be a surprise if the markets reversed at least some of yesterday afternoon’s moves.

"Insurance" doesn't always work.

The thing is, even though the NY Fed walked-back those dovish comments, they still reiterated the need to "act quickly" if things turn-down. This sense of urgency should raise concerns in investors' minds. This is especially true given the fact that the Fed's record of success when engaging in "insurance" rate-cuts is an uneven one. Click here to find out in my premium newsletter what this important development means for investors.

Chips stocks trying to play catch-up.

Having said all this, one key leadership group is playing catch-up. It's getting overbought, but if it can rally further, it should be bullish for the broad stock market. Click here to access my premium newsletter to find out what levels investors need to be watching in the SMH semiconductor index.

Stay nimble my friends.

What I'm trying to say this morning is that the stock market still has some decent upside potential….BUT since the Fed is telling us that we’re sailing through an iceberg field right now. Therefore, investors will NEED to stay nimble going forward.



Matthew J. Maley

Managing Director

Chief Market Strategist

Miller Tabak + Co., LLC

Founder/CEO BTFNow.com

275 Grove St. Suite 2-400

Newton, MA 02466

617-663-5381

mmaley@millertabak.com

Although the information contained in this report (not including disclosures contained herein) has been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. This report is for informational purposes only and under no circumstances is it to be construed as an offer to sell, or a solicitation to buy, any security. Any recommendation contained in this report may not be appropriate for all investors. Trading options is not suitable for all investors and may involve risk of loss. Additional information is available upon request or by contacting us at Miller Tabak + Co., LLC, 200 Park Ave. Suite 1700, New York, NY 10166.

Posted to The Maley Report on Jul 19, 2019 — 9:07 AM
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