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Recently, I received a newsletter from Elliot Wave International stated that It’s Confirmed!! The Fed Follows the Market!!

As the articles attract my concern of the topic. I decided to share it with you guys here so that you all will be exposed to the biggest myth that I have known. By the way, You guys can also receive the newsletter like I’ve got by registering to its free membership. There is no paid membership in Elliot Wave International. Only if you buy their signal analysis or books and etc. That only makes you pay. If just a membership. You will need not to pay nothing plus you will entitled so many freebies such as an Elliot Wave Principle Lesson(Click here to watch the Lesson) that I think it is a best thing I had in there.

Wednesday’s stock market sessions (Jan. 30) ended higher.

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CNBC had a “countdown clock” on its TV screen earlier today, so that you could see just how much of your time on earth would elapse (to 1/100 of a second!) before the Fed rate cut. I guess a countdown suggests an event that somehow “matters.”

And, after the central bank’s formal announcement of the rate cut (at 2:15pm eastern), it did indeed look like an Event That Matters to the stock market — for all of about an hour. The Dow Industrials immediately shot up some 200 points…

…and then gave it all back by the closing bell. The reversal doesn’t always happen that quickly, but being born yesterday is the only decent excuse for being “surprised” by the market’s up-quickly-then-quickly-back-down price action. The same thing has happened more than once since the Fed began cutting rates last year. The Federal Reserve cannot change the dominant trend of the stock market.

What’s more, the notion that interest rates “follow the Fed” is an even bigger myth. See for yourself.

No description necessary — it speaks for itself. That chart was in Monday’s (Jan. 28) Short Term Update. The mythology of the Fed won’t die easily; if facts were relevant, the myth would have evaporated long ago. Distractions like “countdown clocks” and 100-basis point reductions within eight days will keep coming, and are in fact predictable. For example:

Recent market action makes a ‘surprise’ Fed rate cut highly probable before their next meeting on January 30. If so, expect a large rally in conjunction with the announcement.

That too is from the Short Term Update, on January 15, a full week before the so-called “surprise.” It’s what a real forecast looks like. The latest commentary, charts and analysis from the STU is online now, and can be on your computer screen in minutes via the fast steps below.

By Robert Folsom

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