Let’s just go with 1, 2, 3 today. Yup, all you need to know about the market in three simple news items. But before we count down, though, I just want to ask, “How crazy is this volatility?” I mean, what is the problem? The Fed will raise rates and that is it. Period.

Okay, here is a more lucid take for you – the volatility comes from the fact that no one knows what anyone else will do in a volatile market, so everyone is trying to pick their spots, or a lot of investors are sitting on the sidelines, which allows the short-term traders to drive the game.

One

You see how easy this is. I already mentioned the Fed as a reason for the market flying all over the place.

  • Stocks mostly fell on Tuesday and crude oil prices dropped further as investors focused on a U.S. Federal Reserve meeting where the central bank may edge closer to its first interest-rate increase in nine years.

Two

Again, the Fed is jumping into the market today. Why won’t it just go away? The reality is this Fed business will go away and the market will get back to what is important, which, by the way, is not the weak housing report that came out today. If you lived in Illinois, say, or somewhere back in the northeast of the US, would you have shopped for a house last month? I don’t think so.

  • The dollar fell for a second straight day on Tuesday, weighed down again by unexpectedly weak U.S. economic data as the Federal Reserve started a two-day policy meeting.

Three

Now this is where it gets meaningful – oil prices are in trouble again. Yes, the market is looking at this a bit, and they are trying to figure out where the US dollar is going, but, again, all that is hooked up to the Fed business.

  • Oil prices were under pressure for a fourth straight day on Tuesday on expectations of a 10th week of record builds in U.S. crude, although a weaker dollar limited the market’s downside.

Hey! A line from a song just popped into my head, “How can I miss you if you won’t go away?” Love ya Fed, but can you please go away or at least get out of the market’s head?

Now, let me just say that all this volatility in the market is scary, but it does not mean you cannot pay attention and learn. Everything that happens in the market is educational, but to learn, you have to pay attention every day really, at least to some degree.

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Trade in the day; invest in your life …

Trader Ed