Fundamentals——Timing——Direction【Watch a few more times】

The market's attention is quietly shifting——Powell may soon signal the "end of quantitative tightening (QT)," with the opportunity to materialize as early as this week!

Currently, the expectation for interest rate cuts has been fully priced in by the market and is no longer the focus; what Wall Street is really closely watching now is whether the Federal Reserve will officially slow down and stop balance sheet reduction in the near future.

As Powell mentioned at the beginning of the month, they are actively considering slowing the pace of QT at some point in the future, which also means quietly opening a window for the eventual restart of quantitative easing (QE).

Although truly initiating QE may still take some time, perhaps six months later, the shift away from QT is already just around the corner. The market has strong expectations for this——U.S. stocks have already surged to historical highs, and although crypto assets have recently performed weakly, they may also see a “dead cat bounce” type of rebound before the interest rate cuts.

If even such opportunities cannot drive market sentiment, then perhaps the market really needs to turn cautious.

From the signals released by the Federal Reserve, although it cannot be 100% certain that they will announce the end of QT next week, the probability is not low.

Even if not in October, announcing alongside interest rate cuts in December seems almost inevitable.

However, which specific meeting makes the announcement is not actually critical——as long as the market maintains this expectation before the results are revealed and is willing to take advantage of the situation, risk assets will still have upward sentiment support.

It is worth noting that once interest rate cuts are truly implemented, it is advisable to consider taking profits on the upswing.

This may be the last segment of this policy expectation-driven market that is worth seizing. For more aggressive investors, they might even consider lightly positioning for short positions after the positive news is fully priced in, as the market is likely to enter a correction phase after the expectations are fulfilled.