Entering text into the input field will update the search result below

This Is The Only Thing That Matters For The Stock Market



  • Stocks will look for stability this week after last week's plunge.
  • The S&P 500 hit a low of 2,855 on Feb. 28.
  • That may be the most important level to watch at this point.
  • Looking for a helping hand in the market? Members of Reading The Markets get exclusive ideas and guidance to navigate any climate. Get started today »

It was billed as the rematch of the century, with the market and the current FOMC administration facing off for the second time in less than two years. The first time these two heavyweights met was during December 2018 in Las Vegas, Nev. It was a grueling fight, going 20 rounds, with the market finally winning via knockout. However, the rematch didn't last nearly as long.

The Rematch

The rematch this time took place in the market's backyard, New York City. Already the FOMC was at a disadvantage. The crowd was contentious, chanting for the market. After all, the market was on a tear, looking lean and healthy, and the heavyweight champ. However, the market had more than something to prove after being accused of juicing and using the rising balance sheet for its recent hot streak, although there was never enough evidence prove it was the case.

Meanwhile, the FOMC had a string of victories, which included cutting rates three times calming the repo markets, and reflating the balance sheet. The FOMC appeared to have the wind at its back and wanted revenge on the market for taking away its title as the champ back in that remarkable night in December 2018.

The fight started slow with a series of back and forth jabs during the first two rounds. But then, in the third round, the FOMC struck hard, with the first hard blow sending the market to its knees. The FOMC turned to the crowd, with its hands held high, taunting them, and screaming "you want rate cuts," "you want rate cuts," and turned to the market, pointing "you're not getting them, no more."

After three more rounds of the FOMC pounding on the market, suddenly, it stumbled, and the market got in a clean body shot, stunning the FOMC, and that ignited

Follow Me

If you would like notifications when I have new articles published, please hit the follow button at the top of the page.

About The Author

I first fell in love with the stock market when I was 16 years. Now, 25 years later and after a long career as a buy-side trader, I share all of my experience with you daily with timely thoughts throughout the day in Reading The Markets. I use fundamental, technical, and options market analysis to identify individual stock ideas for you.

This article was written by

Mott Capital Management profile picture

I am Michael Kramer, the founder of Mott Capital Management and creator of Reading The Markets, an SA Marketplace service. I focus on long-only macro themes and trends, look for long-term thematic growth investments, and use options data to find unusual activity.

I use my over 25 years of experience as a buy-side trader, analyst, and portfolio manager, to explain the twists and turns of the stock market and where it may be heading next. Additionally, I use data from top vendors to formulate my analysis, including sell-side analyst estimates and research, newsfeeds, in-depth options data, and gamma levels. 

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (58)

The title of this article reflects an appalling lack of perspicacity.
The Social Scientist. profile picture
Agreed. The most important thing about the markets is: will they be open tomorrow?
John Naccarelli profile picture
the S&P already surpassed 3100 again, so maybe you meant 3400.
RAP77 profile picture
"The recent downturn in the equity market may have more to do with rate cuts than the coronavirus."

Ridiculous. That's bad news if true.
EliasMouawad profile picture
@RAP77 It's about the coronavirus. Rates cuts didn't help...
SlickGamble profile picture
Market Maker vs The Fed is a WWE parody waiting to happen. Shame, the Federal Reserve chairperson used to at least provide an illusion of responsibility.
outflow designs profile picture
Thanks for the awesome article.
Funny thing the S&P really ramped 15min after the news about more deaths in WA came out...coincidence ???
Got it ty
Technical analysis: predicting the next roulette spin based on the last spin.
5ofDiamonds profile picture
Technical charts cannot be relied upon because how can ANY technical chart differentiate between a downward going graph because of coronavirus vs. derivatives of mortgages?

The very best they can help is the "day traders".
gametv profile picture
coronavirus is important, but the bigger issue is bernie. the economy will rebound from coronavirus, but if bernie is elected president, the tone for business becomes onerous overnight. that is why today rallied so hard. biden started to consolidate the opposition to bernie. super tuesday results will set the tone for the market.
Maga infinity profile picture
I would rather have Bernie instead of Trump or Biden. At least I am getting free healthcare, tuition. Under Trump what do I get? Another 4 years of MAGA bull shitting? Another 4 years of wealth effect for rich? Another 10T national debts?
Philipsonh profile picture
You will get free nothing from Bernie because your taxes will go sky high and Govt regulations will strangle commerce
ContyC profile picture
@MAGA2020 Do you still believe in free stuff? Nothing is free, it is just other people’s money.
Maga infinity profile picture
I think Trump can declare mission accomplished tonight with such rebound.
Maga, you are being sarcastic, but got a laugh. But really, can you imagine a communist winning the white house. Suddenly, the government wants the profit . Why work ?
Notes from an observer:

1. RE: Rate cuts. The FED can change their mind ANY time.
2. The FED only admits recession AFTER the economy is in recession.
3. Recession almost guaranteed at this point.
4. People saying (regurgitating) that "the common flu kills more people" have not analyzed the numbers; The flu kills like .0005% of those infected and the numbers for Novel Covid 19 is around 2.5% mortality rate.
5. If the C-19 keeps spreading like it has done the last two months then we'll likely see very poor returns for:
a. ANYTHING related to China and therefor nearly all the rest of the world.
b. Airlines and travel related services
c. Fuel and energy related stocks
d. Shipping (FedX, UPS).
e. Think fuel AGAIN.
f. I"m sure there are way more things but the five above are gonna get slammed.

I'm a long term investor who usually likes to buy dips but I don't think this is a dip. I don't think its a bottom. I'd be curiously asking ANYONE who bought securities today what good news do they see making them put out hard earned cash?? I'll tell you I think its FOMO and greed. The first stock up a few points this morning and next thing you know people are ignoring the obvious and piling in without regard for fundamentals - GREED AND FOMO.
Maga infinity profile picture
@Drewworm Did you factor the Fed into the equation?
danwatson888 profile picture
Coronavirus: first Chinese province that declared top-level emergency downgrades alert status
02 Mar. 2020
#4 is wrong, you should use the numbers out of South Korea for the fatality rate. It's roughly 2x deadlier than the common flu. Especially deadly for older people.
panzer profile picture
nice article it looks like your analysis of a bottom is excellent
TDune75 profile picture
"It means the most critical level to watch in the S&P 500 until further notice is 2,855. Nothing else matters."

So some number in the sand (2,855) is the only thing that matters wrt stock prices? Bollucks. The only thing that matters is the reaction of Government officials and private industry management to the ongoing Corona-Virus epidemic (pandemic?). If decisions continue to be made to restrict travel & trade, close schools, ban large public gatherings, encourage work-from-home, and the like; the world will be in recession within 1-2 months. Then there will be the lagging effect of horrendous Q1/Q2/Q3, 2020 earnings reports.

Personally, I'm now 100% cash (short-term US treasuries), and I won't start buying for several months. Oh, but I'm just some ignorant, small-time retail investor. What do I know, versus those Wall Street financial wizards?
Maga infinity profile picture
@TDune75 well, recession doesn't matter when you have the full credit of US government on the back of equity market. What else matters?
TDune75 profile picture
Good point, @MAGA2020 . It wouldn't surprise me if the current POTUS (Trump) authorizes for the first time in American history, government purchases of US equities. Until then, if it happens, I'm staying in the safety of US treasuries.
Maga infinity profile picture
@TDune75 Trust me. It will happen and very soon and very fast.
Higher 4 Longer profile picture
It doesn't matter how high the market goes because as far as I'm concerned the current problems won't be resolved in one day, one week, or one month. This market is still bloated and needs to go even lower because risks still outweighs the rewards. Happy investing folks.
Maga infinity profile picture
@Invest4Dividends Fed never intend to solve the current issues. Monetary policy certainly can not cure fiscal policies. But look, what else can they do to create the wealth effect?
Maga infinity profile picture
only thing matters is the Fed.
Long-Short Manager profile picture
I think you're right many short term horizon folks have been conditioned to think that its all about rates. On the other hand, if this gets really bad in the US, its not clear that consumers will care whether rates are at 0% or 1.5%. Markets probably will (for a little while at least), but in the case where bad scenarios come to pass, I do fear for the day when the market comes to recognize the ineffectiveness of Fed policy in such a situation.
@Long-Short Manager @Mott Capital Management It's not going to get that bad in the US. International market poses risk as the virus has gone amok in Asia/Middle East. I would recommend people to check out TDY - Teledyne. Growing up and up and hasn't been volatile for the past 3 years. www.teledyne.com If this stock goes back to $300 range. It's definitely a buy. Unique products/solutions that are not easy to replicate + Carnegie Mellon University Partnership so R&D pipeline is robust.
Long-Short Manager profile picture
How do you know? We really only started testing properly last week. "Going amok" really only happened after wide-spread testing. This week we're going from 1 lab in atlanta running all tests to 500 labs all running tests around the country.
So you are saying the markets will go up unless they go down?
Chaffey profile picture
I thoughthe was saying that the market deserves more rate cuts....because without them the market goes down. Most so called investors want rates to be negative . This way they are assured of gains and it doesn't matter what they invest in. Free money !
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.