This is something from ages ago. A don't ask, don't tell gap down on nothing. This after a strong close. The ES is no longer strong enough to overcome European weakness, however slight it may be. It looks like Superman has lost some of its power.
With the FOMC announcement tomorrow, I didn't expect such weakness after yesterday's relatively strong price action on "bad" news. But the fundamentals of this stock market have changed, and you can't stubbornly expect it to act like the Teflon King. Not with big chunks of the market affected by lower oil, stronger dollar, and weak overseas growth.
This market will take some getting used to, but even with sentiment that can be described as cautious, the market still can't get any lift on a non-news day. Contrarian analysis used to work like a charm for the bulls for so long, but it is more hit and miss now. A change of character.
I am sure I am not the only one surprised to see such a chunky gap down after yesterday's trading, and with a recently strong Europe. Now it is looking more likely that once Fed "protection" is gone after their announcement tomorrow, shorts and sellers will run amuck and cause some serious chaos. If I was long the SPX, I would sell before the announcement tomorrow. With this incipient weakness, It is looking like a big down day is imminent any day now. This time, it probably pays to follow the herd, and be cautious. IMO, this is no time to be a brave bull.
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3 comments:
Are expectations for Fed to announce they will raise rates tomorrow?
I thought the expectation was that they will hold off for the rest of this year because of deflation?
I was long JUNO since Friday not knowing that the storm is actually named Juno. LOL
Expectations are for Fed to do nothing, but come up with more dovish language. So market expecting Fed to tell them what they want to hear. No rate hikes anytime soon.
Short TSO 80.71 through common.
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