Don’t Fight the Fed. Don’t Fight the Tape. The Federal Reserve appears increasingly likely to be on a tightening course, with potentially one or two rate hikes ahead. The probability of a hike at the next meeting is currently around 55%, and much of that risk may already be discounted in the market. Still, the larger point shouldn’t be overlooked: the Fed is leaning toward tightening, not easing. There are two old market rules I still respect deeply: Don’t fight the Fed, and don’t fight the tape. Right now, those two signals are somewhat at odds. The Fed is becoming a potential headwind, while the tape remains relatively bullish. The major indexes are holding up well, and certain areas of the market continue to advance. But beneath the surface, participation is clearly thinning and the
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