Tuesday, December 13, 2016

Trading Ideas for After the Fed Meeting

I have no idea what impact the Fed meeting will have on stocks and bonds.  But I am ready to take action for a major move in either direction.

I expect the Fed to raise interest rates.  Past that, I have no expectations.  I have no predictions on the magnitude of the increase or the tone of the Fed notes.   So the markets may react either positively or negatively.

Option 1.   The stock and bond market react negatively.   I have a list of stocks that I will try to purchase at lower prices.    Sectors that I am considering are:  Biotech, Pharma, Utilities and Consumer Staples,   These have been the laggard sectors since the election.  I've been waiting for them to go lower.

Option 2.  The stock market reacts positively.   I will use the opportunity to trim shares in positions with significant gains.   At this point, I would reduce holding mainly in the total stock market ETFs, financials and oil stocks.   These have rallied signficantly since the election and I expect a short term top is near.   If material stocks surpass recent highs, I would also consider selling some of these.

Option 3.  The markets are flat.   I will make small selective purchases of a few stocks I have been following.

I expect Option 1 will occur, so I will take the George Costanza opposite choice and go with Option 2.

For more on Ideas You Can Use, check back Tuesdays for a new segment.

This is not financial advice. Please consult a professional advisor.

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