Cautious Greed After the Fed Cut: Weekly Notes & Trades
Stage-2 trend, buy-the-dip bias, and new buys
Important: This post is not investment advice. Please consult a licensed financial adviser before making any investment decision.
Weekly note
The key event: the Fed cut rates by 0.25% and left the door open to more cuts if data supports it.
GDP nowcasts for Q3–Q4 hover near 2%. The labor market shows some softness but nothing alarming.
Inflation may tick up to ~3% from 2.9% in August.
Credit conditions keep improving, reducing near-term recession risk.
Earnings are running ahead of expectations and business sentiment improved as tariff uncertainty eased.
Bottom line: I remain medium-term bullish (3–6 months). Valuations aren’t cheap and the Fear & Greed Index sits in “Greed,” so I still expect a mild, seasonal correction. It hasn’t arrived yet. This remains a buy-the-dip environment—but markets like to surprise. If the data or the charts change, I’ll change stance.
Pros and cons right now
Pros
Fed is easing and remains data-dependent.
Credit spreads/conditions are benign.
Earnings and sentiment are improving.
Cons
Valuations are fair or elevated, especially for large caps in leading sectors.
Sentiment is hot (“Greed”).
Seasonally, Aug–Oct can deliver shakeouts.
Positioning (my view): Lean bullish with discipline. Buy dips; respect stops.
S&P 500 (weekly) — Stage Analysis
Stage / Trend: Stage 2 uptrend. Price is at/near highs and above rising 10-, 30-/40-week moving averages.
Momentum:
RSI ~70: strong; can stay elevated in Stage 2.
MACD above zero and rising: confirms upside momentum.
Volume: Steady; no red flags.
Supports to watch:
First: 10-week MA.
Guardrail: 30-/40-week MAs.
August swing area: a break back below it would hint the uptrend is tiring.
Bottom line: Healthy Stage-2 uptrend. Treat pullbacks to the 10-week as normal.
Portfolios
I’m buying 4 stocks this week. Details for paid subscribers below.
