No one has a crystal ball to predict which way the stock market will zig or zag, but plenty of folks have theories. For example, technical analyst Edson Gould developed a market rule of thumb known as ‘three steps and a stumble.’ It states stock prices may fall after the Federal Reserve (Fed) raises the Fed funds rate three times in a row without a decline, according to Market Technicians Association. 
The idea is three increases show the Fed is serious about keeping rates at a relatively high level for a significant length of time. Higher interest rates could potentially mean higher costs and lower profits for businesses. As a result, stock investors may sell shares and share prices may fall. 
Last week, with employment and inflation data approaching Fed targets, the Federal Open Market Committee raised rates for the third time, pushing the Fed funds target rate into the 0.75 percent to 1 percent range, reported Financial Times: 
“Fed policymakers’ forecasts for growth and inflation remained little changed, with growth tipped to be 2.1 percent this year and next year, slipping to 1.9 percent in 2019. Core inflation is set to be 1.9 percent in 2017 and 2 percent in the two following years. The possibility of looser fiscal policy emerging from Congress has triggered speculation that the central bank will have to further accelerate its rate-rising campaign, but a number of policymakers are insistent that they want to see firmer plans emerging from Congress before making a call on the impact of possible tax cuts on the economy.”
How well is Mr. Gould’s theory holding up this time around? Well, major U.S. stock market indices haven’t stumbled yet. They finished the week higher, as did most markets in Europe and Asia.  MarketWatch indicated Asian markets were encouraged by indications the Fed may not increase rates as often as expected this year,  and CNBC reported European markets were boosted by a better-than-expected outcome for mainstream parties in Dutch elections. 
While financial theories can be fascinating, when it comes to investing your hard-earned money, be mindful that trying to predict short-term market zigs and zags probably won’t get you any closer to realizing your financial goals.
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* The original “Weekly Commentary” was prepared by Peak Advisor Alliance. Jonathan DeYoe is a member of Peak Advisor Alliance and adds, subtracts and edits before publishing.
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* “Three Steps and NO Stumble . . .”
 https://www.ft.com/content/6723f69c-09a4-11e7-ac5a-903b21361b43 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/03-20-17_FinancialTimes-Fed_Increases_Interest_Rates_as_Inflation_Pressures_Loom-Footnote_3.pdf)
 http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html (click on U.S. & Intl Recaps, select “The central banks have spoken,” and scroll down to the Global Stock Market Recap) (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/03-20-17_Barrons-Global_Stock_Market_Recap-Footnote_4.pdf)
 https://www.ft.com/content/71e8c01e-fac0-11e6-9516-2d969e0d3b65 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/03-20-17_FinancialTimes-Burgers_and_Mircrochips_on_the_Menu_for_US_Fast-food_Chains-Footnote_7.pdf)