Samwise Quick Reference Handbook
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Fed meeting is Sep 16-17. If they cut interest rates, I anticipate market goes up. How does this change timelines or outlook? I can’t imagine correction happening with interest rate cut happening.
Not sure how applicable this is, but if what Sam says here is true:
then 16 days would put us around mid-ish September for a bottom. Not sure if that’s being too optimistic though. Feels pretty fast for the correction to have finished, but Sam does say corrections happen quickly.
There’s no “if” for Sep. CME futures call for 25 bps at the Sep meeting.
More important than the cut itself — which is already baked in at 83% — is whether the fed say anything that increases the odds for cuts at subsequent meetings.
Right now, the market has fully priced in a September cut The fed has never deviated from whatever the market expects.
At 83% the Fed is cutting as of now. If something changes between now and then resulting in a reduced expectation than it could change, but as of right now if nothing changes, the fed is 100% for sure cutting. 83% = 100% essentially.
What I expect might happen is the market might sell off well ahead of the meeting and then the Fed meeting could cause either short-term rebound bottom or further heavy selling based on the Fed statement.
September rate cut is now backward looking. A September rate cut has no impact on the market one way or the other. The fed statement and commentary does have an impact.
Indeed, a move to $500 makes sense; this corresponds to a 12.2% correction to the current level of $570.
A massive selloff and a breakout to the $490 support level would mean a 14% decline, which is also likely.
It remains to be seen whether this decline will be gradual or fleeting over a few sessions…
Watching the market move up on news of the President trying to fire a Fed Governor for the first time in history is just today’s reminder that the market is often divorced from the news cycle