OK, I watched too much Glenn Beck this week but the Fed's after market move made me feel better. I stuck to my guns concerning resistance in the market despite the Nasdaq flipping me the bird earlier in the week. And after I filed my column this afternoon - before the market scooted higher - I still had faith that the market was not looking like it did in July. This was more than just a "healthy correction."
Here is the text that I left on the cutting room floor before submitting the column to my editor. Yes, I am asking you to believe that it was written this morning and not after the Fed's move.
Quote:
We all know that one day the Fed will wind down its low rate policy but news or rumor that it will happen sooner rather than later has already given investors pause on several occasions. Events in Greece and elsewhere in Europe still hang heavy, too.
End Quote
This was the shock from outside to which the weak technicals left the market vulnerable. The Fed just told us that they are starting to wind down sooner and stocks gave up the entire day's gain in short order.
Of course, even I am not fool enough to extrapolate too far beyond this one hour's worth of post market trading. But to me, it is another bit of fuel for the "where there's smoke, there's fire" line I wrote in this morning's Quick Takes Pro.
6 comments:
I thought the Fed's timing was extremely odd, coming on the eve of expiration. I know they like to pull that stunt when they think the market will react positively, but I can't imagine what the reasoning was behind the decision this time around.
The Fed, through Governor Elizabeth Duke, is trying to sell this as a non-event. This is not a warning to consumers and businesses to brace for higher credit costs, but a return to business as usual.
I can buy this to some extent but it can't be good for the banks when you take away the free money.
Paul O'Cuana
And it probably is a non-event, for the most part. But if the market was looking for a reason to bounce the indices back down off their 50-days, this would do the trick.
Like I said, I'm not one to believe and trade on rumors and conspiracy theories... But yesterday I noted the extremely odd dollar futures and put/call ratio behavior. Seeing a 4.5 standard deviation event the day before the fed having a "surprise" hike sure does make you wonder...
No wonder why so few trust the financial system right now.
I live the media this morning. Some say outright that they don't believe the Fed's language that the hike means nothing. Some swear vehemently that it means what it says.
I'll continue the "where there's smoke there's fire" theme.
And I don;t trust them either. I find the entire system to be a crock and even blogged months ago that trading has jumped the shark.
make that "I love the media"
although I do live there, too
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