I'm nervous. I believe the market has shown how nervous it's been as money quickly rotated from growth to value stocks ahead of today's Fed announcement. Here's a 10 year weekly look at the IWF:IWD ratio (Russell 1000 growth vs. value). Check out how it's completely fallen apart the past couple weeks:
Will we fall further after the Fed announcement today? One thing I can say is that the last three rough patches in U.S. equities have immediately followed Fed announcements. Need proof?
I'm not sure what will happen after 2pm EST today when the Fed provides its latest announcement, but I do know one thing. The stock market has learned from prior examples that the current Fed is anything but transparent. Traders are being very cautious, ditching the stocks that would most likely be hurt if the Fed maintains its more hawkish tone (vs. foreign central bankers).
We'll know in about 5 hours.
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