Friday, September 18, 2015

Fear and Loathing

That breakout above 2000 didn't last long.  All of one hour after the FOMC meeting.  Europe's big selloff comes after Yellen threw her hat in the ring in the currency wars.  The Fed will not tolerate a strong dollar, or a weak US stock market, so there were dovish words thrown all over the place.  Now the crowd feels suckered for believing the Fed might raise rates or at least talk hawkish.  They did neither.  You can never underestimate the dovishness of this Fed.  Never.

But we got a big selloff after the pop on the news and it is back to your fear and loathing market.  Stocks are hated out there, but that is not enough to get me to buy.  I want to see a longer pullback before I commit capital to this market.   We just had a long rally leading up into the FOMC meeting.  It takes time for the bears to get fully loaded with shorts.

The market still favors the dip buyer, but now is not the time to be aggressive on the long side.  In fact, I think there is a short term opportunity to short the market, but the post opex selloff was moved up a day into opex Friday, so I am just watching for now.  I am interested in buying bonds again as there should be a lot of pent up demand now that the Fed is out of the way and those fearing a rate hike will come back in to the safety of US Treasuries.


MM111 said...

Going to try a small on at 1962. We might want to go higher first before we head down.

MM111 said...

Going to try a small long at 1962. We might want to go higher first before we head down.

Market Owl said...

I will wait to dip my toe in the ES waters next week. Waiting for lower levels, around S&P 1925 and 1905.