7/27/23 The Last Rate Hike


Officials at the Federal Reserve hiked “the federal funds rate to 5-1/4 to 5-1/2 percent” on Wednesday. That’s a ¼ percent increase.

And markets took the news in stride. The move was widely expected, so investors had already priced in this hike.

The major indexes ended the session mixed…

  • Dow Jones +0.2%
  • Nasdaq -0.2% 
  • S&P 500 -0.0%
  • Russell 2000 +0.7%

The Dow Jones’ 13th consecutive win marks its longest winning streak since 1987.

Is The Fed Done?

So how did the market manage to post gains in the face of a rate hike?

Federal Reserve Building // From Seeking Alpha

Investors are betting that the Fed is done. 

Forecast from Fed watchers earlier this year predicted rates would get to the current levels

Now that those levels have been reached, the market believes the Fed is now done hiking and will maintain rates through at least the end of the year.

A rate decrease could come sometime next year.

Sector Round Up

6 of 11 sectors ended Wednesday’s session in positive territory.

At the top…

  • Communications (XLC) +1.6%
  • Industrials (XLI) +0.7%
  • Financials (XLF) +0.6%

At the bottom…

  • Materials (XLB) -0.3%
  • Technology (XLK) -1.3%

Risk-on sectors were scattered and included top and bottom positions.

The market is struggling to find a mood.


The Fed’s latest moves put the market at ease.

The VIX fell—It’s at pre-pandemic levels this morning.

VIX Daily Candles – Chart by thinkorswim

Without fear, the market isn’t likely to fall.

Without a consensus desire for risk-on stocks, the market is unlikely to move much higher.

For now, we expect sideways movement … at least until the overbought conditions are relieved.

Your latest readout…


The Fed has just three remaining FOMC meetings this year.

Interest rate decisions are scheduled for…

  • September 20
  • November 1
  • December 13


*Low Float
^Open Position

*BTM support at $3.80
EYPT support at $10
KNSA on watch
MNMD support at $4.20
^OSTK support at $30, resistance at $32.75
APLD support at $10, resistance at $11
WEAV support at $11.50
WW on watch
QSI support at $3

Secondary watchlist—float 100+ million

HLLY support at $6, resistance at $6.50
CAVA support at $48
MKFG on watch
RKLB support at $7
XPEV on watch

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