The Fed Blinks

The big news of the day, and perhaps the explanation for why market participants are wearing their rally hats came from the Fed. Yesterday's Fed notes strongly indicated that the magical word "measured," as in measured rate hikes, will be removed from the next official release. The consensus is that after two more hikes the Fed will stop raising rates at 4.50%. This is an explosive development that will surely bolster the year end rally and quite possibly extend it well into next year. Despite massively overbought conditions, a "get in at all costs" temperament has taken over Wall Street. Don't fight the trend here, but be assured what comes up will come down. The market has the potential to tack on some serious gains as we close out the year and don't be fooled, this is all very bullish action. Even so, the market NEVER goes straight up so we will eventually get a pullback that will shake loose a lot of trading positions. Trailing stops and small share sizes are the best way to play this market until we get a reasonable pullback.