The selling today is long overdue after the recent rally. You're seeing a lack of buyers ahead of the Fed. You'll probably see more selling tomorrow as the meeting begins.
More Quotes from Tom Schrader:
I think the unemployment report is the main indicator people are waiting for this week.Tom Schrader
If it's 25 basis points and the bias is neutral, they're going to sell it off. If it's 50 basis points and neutral, they'll sell it off. You'll probably see a smaller bout of selling if it's 50 points, because although that would mean the economy is doing worse than we've thought, it would also signal that the Fed is not going to cut again for a while.
Tom Schrader
The concern is that we're very overbought right now.
Tom Schrader
I think we're going to see some sideways action this week. We had a nice run last week and there's a significant amount of economic and earnings news due out later in the week. I think people are taking a 'wait and see' approach ahead of that.
Tom Schrader
It might be tough to keep up this pace, but the gains will probably continue. People are definitely putting money into stocks.
Tom Schrader
I'm trying to stay positive but it's really hard. I guess one silver lining is that October, historically, has often been a period when we've been able to put in a good bottom and see real capitulation. We've already hit several lows this month and from a technical standpoint, it looks like because we are at such extreme levels, we really could see some sort of rally before the end of the year.
Tom Schrader
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