There are standard technical indicators that provide some insight into the direction of markets. Engrbytrade™ utilizes one technique of chart structure analysis during the course of specific time frames. TLT is an example. The basic TLT chart structure created between July 2006 and September 2007 is similar to the chart created between October 2023 and September 2024. The underlying difference between the two at this point is that the Fed cut rates in August and September of 2007. The first rate cut in 2024 occurred on September 18, 2024.
The Fed dropped their Fed Funds rate from 5.26 to 5.02 on August 17, 2007 in response to the subprime lending crisis and market instability. On September 18, 2007 the Fed Funds rate dropped from 5.02 to 4.94 in response to the mortgage meltdown.
The first rate cut in 2024 occurred on September 18, 2024 when they dropped the target range to 4-3/4 to 5 percent. No clear reason was given, other than inflation dropping to 2.5% in August. Dropping their target range for the federal funds rate means something big is brewing in the background. Expect another rate cut on November 7, 2024.
Note that this information is for research and educational purposes only. It is not a recommendation.
