Wednesday, September 10, 2014

Late Day Reversals

We got another late day reversal to the down side yesterday.  The market has been finishing relatively weak and looks heavy.  It doesn't have much predictive power, but it is noticeable that we are having trouble trading above 2000 for more than a few hours.

That AAPL event was well advertised, and traders seemed to remember being burnt by buying ahead of the event in the past, so we didn't get that big selloff on the event.  Overall, the coming IPO supply is casting a shadow over this market, and fund managers could already be raising cash for the Alibaba IPO.  That is a lot of money to free up, $20B.

Bond market looks worried about the Fed changing the language in their statement, to take away lower for longer language.  Should we also analyze what Yellen is going to eat on FOMC day?  The lack of new news is forcing the traders and media to nitpick for anything out there to move the market.  After the taper tantrum last year, the Fed is going to be extremely careful hinting at tighter policy.  This is meaningless, and last week's NFP number is probably gonna freeze the Fed in its tracks next week.

Looking for a pullback down to 1950 to 1960 after the Alibaba IPO comes out and the supply weighs on the market.  That should be near the end of September.


Anonymous said...

Can you explain why 10-year UST yield is rising? Is it related to the rise in Bund yield? Thx

Market Owl said...

Rumors about Fed changing language on FOMC statement, and Bund yields rising.

Anonymous said...