Trading Places with Tom Bowley

Hold Your Breath, It's Fed Day!

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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.

I'm now writing a very thorough Daily Market Report at EarningsBeats.com and it's available to everyone for this week only - so please check it out. CLICK HERE to view Tuesday's DMR. Let me know what you think. You can drop me a line at "tomb@stockcharts.com".

Also, I offer a free EarningsBeats.com Digest newsletter, highlighting earnings and relative strength and how to incorporate both into a successful trading strategy. You can SIGN UP here.

Thanks for your support!

Happy trading!

Tom

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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