High Heeled Traders

The Fed Awakens

December 16, 2015

It’s been a wild ride the last week but that has seemingly faded, how did you feel about your holdings. If you have been able to get out with a small loss and without panicking, you are well on your way to investing successfully. I have losses too stemming from my inaction- I have been sidelined last week with some deadlines so I had to forego trading opportunities, nonetheless, I went back and checked the fundamentals of the company and while it may not be the “favourite” when bargain hunters came, it still retained its ‘BUY’ rating among analysts and it is an undervalued stock so it has been getting some bounce.
I should have been nervous, that was some 5% drop I had to endure, good thing with my review of investment psychology materials by Dr. Van Tharp (and some of my fave snacks crispy glazed pili nuts LOL ) I was feeling very good, clear to get the right trade and profit on the move downside that still plagued the AAPL of my eye as of yesterday.

Today the US Fed is expected to raise interest rates, there will also be a forecast of the economy so I’m expecting some more volatility. Investors already know the rate rise will happen, and yes investors can also be fickle, get nervous, get too excited. So, IF you are waiting to get in, you can do so next week when “everybody” has come to terms with that rate rise. Also, while it is expected – the rate rise might give way to some selling in those unfortunate mining companies already suffering from price meltdown because they normally carry debt in that capital-intensive industry. Plus if the debt is in USD, that’s going to get stronger from the actual rate rise, then you have a bad (or even say worse) outlook for commodity producers, oil companies etc. In my view, this will make the market swing wildly, or even spread to the wider market so we have to be aware and prepared with some risk management / hedging strategies.

It’s not all doom and gloom though, we can get into the sectors / companies that move favourably with the rate rise, because it will be a reliable pattern to occur again in the future. ie. as there will be more rate rises as we are just starting this cycle.
Star Wars opens tomorrow and today …The Fed Awakens… May the Fed be with you…

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