Market timer Tom McClellan, publisher of the McClellan Market Report, said he was changing to short-term neutral Wednesday, after being bearish since after the Sept. 9 close, ahead of the Federal Reserve's policy setting committee's (FOMC) meeting. "I don't want to ride that bucking bronco," McClellan wrote. The Fed is expected to raise overnight interest rates by 0.75 percentage points as it continues to move aggressively to fight inflation, which has sparked worries that the Fed may tip the economy into recession. McClellan noted that the stock market continued to decline Tuesday even though Fed action was well anticipated. The S&P 500 has dropped 5.2% since McClellan turned short-term bearish, to close Tuesday at a two-month low. "The FOMC is still meeting this week, and still announcing its decision on Wednesday," McClellan wrote. "But the fears appear to be reaching a climax on the eve of that meeting."
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