[Altos Weekly Traders Edge] Decoding the Post-Rate-Cut Scenarios for Stocks...Details Inside

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The S&P 500, a broader market indicator, even recovered its year-to-date losses, while mega-tech giants pushed the index to yet another peak. However, a crucial test awaits this week: earnings reports from tech titans like Apple, Microsoft, and Meta Platforms. Investors, who seem to have already priced in rosy reports, might sell the news, potentially making February another volatile month. Instead of a rapid price surge, the consolidation of November and December's gains appears to be happening gradually. The average S&P 500 stock, measured by its equal-weight index, hasn't breached its January 2022 peak. Instead, it experienced a moderate 3.5% dip before recouping losses in the past two weeks. This healthy correction bodes well for future highs, making them potentially more sustainable. As February unfolds, investors can expect more of the same uncertainty, with the Fed keeping them guessing about the impending rate-cut cycle. Chairman Powell is likely to play his cards close to his chest during the upcoming Fed meeting's press conference. While everyone yearns for clarity on the rate-cut timeline, he'll likely remain noncommittal, keeping all options open. This calculated ambiguity aims to curb investor enthusiasm for riskier assets, as excessive demand could fuel inflation, contradicting the Fed's target for stable prices. However, the high-frequency economic data expected next month might make delaying monetary policy normalization difficult by March. Two further inflation reports are likely to reveal the Fed nearing its 2% target, while two additional job reports might indicate sub-trend growth leading towards summer. Monetary policy changes have a lag effect, requiring the Fed to move towards a neutral interest rate well ahead of its inflation goal. So, what happens when the Fed starts cutting rates? The pessimists might warn of a looming crash, but history doesn't necessarily support this fear. The Fed has previously implemented panic-driven rate cuts following adverse events that had already significantly impacted markets. The COVID-19 pandemic serves as a recent example. In such scenarios, market performance post-cut tends to be positive within the subsequent 6-12 months, though primarily recovering previous losses. Alternatively, the Fed might cut rates in response to an economic downturn, hoping to mitigate a recession. In these cases, returns throughout the following year tend to be dismal. However, when the Fed initiates rate cuts this year, it will be part of a broader policy normalization process. Historically, this has led to very attractive market returns over the subsequent 6-12 months, something I expect to see in 2024. Negotiating the market in the wake of the impending rate-cut cycle requires understanding the nuances of historical precedents and carefully interpreting economic data. While short-term volatility is likely, the broader outlook for 2024, anchored in policy normalization, paints a potentially optimistic picture for market returns. Let's see how this pans out. - The Team at Altos Trading Sponsor There’s one thing every trader should be looking for Legendary trader Jack Carter has identified a hidden “calendar” of stock that, according to his research, have climbed like clockwork on the same day of the year, every year, for as many as ten years or more! Pause and think about what kind of an edge that could give you. Because once you see how powerful an advantage that is, you’ll want to everything and learn about the Income Calendar now.]( Missed our jam-packed Live Weekly Market Review on Tuesday? No worries! Buckle up for a quick recap. This week, we embarked on a market trip, starting with the Market Overview. We identified key support and resistance levels, acting as invisible guideposts shaping the current climate. Next, we donned our explorer hats for a deep dive into the 36-Month Moving Average, unveiling the long-term forces shaping the market's path. For the thrill-seekers, we cracked open the Risk Reversal Trade strategies, empowering you to navigate market volatility with the confidence of a seasoned trailblazer. In our crowd favorite Share Your Favorite Symbol segment, the community chimed in with diverse perspectives and unearthed hidden gems. Finally, the Ticker Q&A Roundtable served as our campfire, where we expertly tackled your burning market questions. Don't miss out on future adventures! Join us live every Tuesday evening for a fresh dose of market intelligence. Can't make it live? No sweat! We'll have the recording ready by Wednesday noon, so you can revisit the insights at your own pace. See you next week! This week our topics were... - Market Overview - Mapping Out Key Levels - Review 36-Month MA - Risk Reversal Trade - Share Your Favorite Symbol! - Ticker Q&A Roundtable [CLICK HERE TO WATCH THE FREE REPLAY]( Sponsor [New Customers earn 5.25% APY* (variable)]( Store your money with Cash Reserve, a high-yield account built for peace of mind. New customers earn 5.25% variable APY*—that’s 13x higher than the national savings rate. ** Plus, your money’s FDIC-insured up to $2M†at our program banks and no limits on withdrawals and transfers. **The national average savings account interest rate is reported by the FDIC (as of 5/15/23) as the average annual percentage yield (APY) for savings accounts with deposits under $100,000. [Sign Up Now!]( Disclaimer: The Altos Trading Alert Newsletter is published as an information service for subscribers, and it includes opinions as to buying, selling and holding various stocks and other securities. However, the publishers of the Altos Trading Alert Newsletter are not brokers or investment advisers, and do not provide investment advice or recommendations directed to any particular subscriber or in view of the particular circumstances of any particular person. Altos Trading, including its owner, does not participate in any trades issued through the alert services. Subscribers to Altos Trading or any other persons who buy, sell or hold securities should do so with caution and consult with a broker or investment adviser before doing so. Trading securities and options involves risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade securities and options, and must meet suitability requirements. Past results are not necessarily indicative of future performance. Performance figures are based on actual recommendations. Due to the time critical nature of trading, brokerage fees, and the activity of other subscribers, there is no guarantee that subscribers will mirror the performance of the service. Performance numbers shown are based on trades subscribers could enter based on the trade alerts. Altos Trading, LLC assumes no responsibility for any losses incurred by any individual or entity as a result of trade alerts or strategies taught through courses or coaching services. 7154 W State Street Suite 169 Boise Idaho 83714 USA Disclaimer: The Altos Trading Alert Newsletter is published as an information service for subscribers, and it includes opinions as to buying, selling and holding various stocks and other securities. However, the publishers of the Altos Trading Alert Newsletter are not brokers or investment advisers, and do not provide investment advice or recommendations directed to any particular subscriber or in view of the particular circumstances of any particular person. Altos Trading, including its owner, does not participate in any trades issued through the alert services. Subscribers to Altos Trading or any other persons who buy, sell or hold securities should do so with caution and consult with a broker or investment adviser before doing so. Trading securities and options involves risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade securities and options, and must meet suitability requirements. Past results are not necessarily indicative of future performance. Performance figures are based on actual recommendations. Due to the time critical nature of trading, brokerage fees, and the activity of other subscribers, there is no guarantee that subscribers will mirror the performance of the service. Performance numbers shown are based on trades subscribers could enter based on the trade alerts. Altos Trading, LLC assumes no responsibility for any losses incurred by any individual or entity as a result of trade alerts or strategies taught through courses or coaching services. 7154 W State Street Suite 169 Boise Idaho 83714 USA [Unsubscribe]( | [Change Subscriber Options](