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Just Another Day In Pair Of Dice
After a nominal gap lower on the open the market began the trading day ahead of the second day of the Federal Open Market Committee stampeding higher. The Standard & Poors 500 rocketed over 1% in the first half hour of trading and the bias ahead of the Fed was set. With yesterday’s decline now almost completely retraced traders spent the next three hours grinding the market higher with only a brief and shallow selling cycle between 12:15 and 12:45.
At 1:30, with the Fed statement due out within the next hour and the market now at the highs of the day, traders unwound a few positions causing prices to drop nearly 3 points. As the clock struck 2:15 and the FOMC statement hit newswires and financial entertainment channels, the market did it’s usual half a percent reactionary gyration over the course of the next few minutes before fading about a half percent to 1002.
Determined to stay above 1000, seemingly out of nowhere the market shot 1% higher over the the next fifteen minutes before reaching what would be the high for the day of 1278. The powerful fifteen minute move briefly pushed the Nasdaq100 to marginal new highs for the “new bull market”. The Nasdaq composite came close but fell a few decimal points short of a new high.
With the afternoon highs in and shorts thoroughly toarched once again, the market spent the final twenty-five minutes of the trading day selling-off by dropping nearly a half percent before closing at 1005.8, higher by 1.14%. The technology heavy indices outperformed the broader market today with the NDX and COMPX closing higher by 1.56% and 1.47% respectively. The Philadelphia Semiconductor Index reversed a five day decline by advancing by 5.14 points or 1.77%.
FOMC Moves Words Around, Changes Verb Tenses, Defines Autumn
The August FOMC statement was nothing if not uninspiring. Not much new was mentioned other than, in the view of the Fed, the recession evolved from slower contraction to “leveling out”. In other words, the pace of the recession is “less bad” than it was a few months ago. The statement went on to say that the Fed continues to anticipate a gradual resumption of economic growth. I read this as meaning the Fed expects any turn in the economy to resemble a “U” shape rather than a “V”. The FOMC also further defined the time they anticipate the concluding their quantitative easing program from autumn to October.
The chart of the day is…
This Is Your Captain Speaking, We Are Experiencing Some Turbulence
Bankrupt Frontier Airlines, over the course of two and a half months, puts in both a 90% decline and a 1000%. rally.
Just another day in pair of dice.
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