Which Way Wednesday – Virtual Fed Meeting Edition

Comic: Addicted Markets Beg Powell For More Fed Rate Cuts As S&P ...Will Powell be wearing pants?

That is the burning question on everyone's mind as the Chairman of the Federal Reserve will be zooming in his address to the nation at 2:30 this afternoon.  Powell has already said (3 week ago) that the Fed will act "forcefully" to help the US recover and that the economy can be "robust" once the virus is contained.  Traders are assuming that means more of the same today but today it's Powell's job to assess whether or not the virus is contained – so that's a potential point of disappointment as well as the strong likelihood that Powell will have a "wait and see" approach as clearly they can't possibly have spent the $4Tn they have been allocated yet, so those expecting more from the Fed are likely to be disappointed.  

We are certainly waiting and seeing this morning and we have a list of 16 positions we are thinking about trimming from our Member Portfolios, about 20% of the total and we'll discuss two of them here in our Money Talk Portfolio Review, as I'll be on the show this evening (BNN at 7:30) and we only adjust the portfolio on show days. 

The last time I was on the show was March 11th, a bit before we hit bottom and I made a call for jumping into blue chips and I made a call for selling puts on stocks you want to buy, using Valero (VLO) and Ford (F) as examples.  We also added Tanger Factory Outlets (SKT) as a long-term dividend play.  Our Money Talk Portfolio was down 8.4% at the time and we made a series of aggressive moves I detailed in that morning's PSW Report – in order to take advantage of the market decline.  

We had the advantage of being mostly in CASH!!!  In fact, we had $99,235 of cash in the portfolio while the positions themselves were worth -$7,670 for net $91,565 out of our original $100,000 we began with back on 11/13/19.  We had stayed "Cashy and Cautious" – as we did with all of our Member Portfolios, as we felt fairly certain that SOMETHING was going to cause the market to sell off – we just didn't expect…
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