Fed Statements Drive New Rally Momentum In The Stock Markets
Last week, the US Federal Reserve reiterated statements in support of continued easy money policies and support for a recovering US economy. Additionally, Jerome Powell made a statement suggesting tightening too early could be much more damaging than waiting until sufficient headwinds are behind us. I interpret this as stating the current inflationary concerns are less important than the current global market expectations. We can likely weather moderate inflationary concerns if the economy continues to strengthen – whereas tightening right now may not reduce inflationary concerns and may prompt a broad market slowdown within the US and globally.
Sign up for my free trading newsletter so you don’t miss the next opportunity to learn more!
In short, traders and investors perceived these comments as “Here we go – off to the races again” and the US markets rallied sharply on Friday and in early trading on Monday, August 30, 2021.
NASDAQ/Technology Leading The Rally Charge
This Daily QLD, ProShares Ultra QQQ ETF, chart highlights the extended rally phase of the NASDAQ/QQQ. With the current Fed statements, we expect $80 to be broken as this new rally phase attempts to target $82 to $84 – another 5% higher (or more).
IWM Breaks Above Dual-Pennant/Flag Formations.
This IWM Daily, Ishares Russell 2000 ETF, and the chart clearly illustrate a very strong Dual-Pennant/Flag breakout that has taken place with Friday’s rally attempt. The move above $222.50 is very clearly an attempt to break above the Dual-Pennant/Flag channels and to break into a new Bullish price trend.
Once resistance near $227.50 is broken, the Russell 2000 ETF, IWM, should attempt a bigger rally attempt targeting $233 to $235.
We need to see this momentum carry forward through the end of September as the end of Q3:2021 should continue to trend higher with the US Federal Reserve’s recent statements. Additionally, traders should be positioning capital ahead of the end of Q3:2021 expecting another round of strong earnings and profits in October/November – pushing the Christmas Rally into high gear.
Don’t miss these incredible opportunities and be sure to take advantage of the strongest performing market sectors – that’s where the real opportunity lies for traders.
Please take a minute to learn about my BAN Trader Pro newsletter service and how it can help you identify and trade better sector setups. My team and I have built this strategy to help us identify the strongest and best trade setups in any market sector. Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades. You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.
As something entirely new, check out my initiative URLYstart to learn more about the youth entrepreneurship program I am developing. This is an online program of gamified entrepreneurship designed to introduce and inspire youth to start their own businesses. Click-by-click, each student will be guided from their initial idea, through the startup process all the way to their first sale and beyond. Along the way, our students will learn life lessons such as communication, perseverance, goal setting, teamwork, and more. My team and I are passionate about this project and want to reach as many people as possible!
Have a great day!
Chief Market Strategist