Just when you thought were off to the races sellers swooped in knocking prices lower by the close. For much of the day stocks drifted toward the breakeven levels up until the FOMC announcement. As expected the Federal Reserve Bank said it would end its QE program at the conclusion of October and continue to be accommodative. The language regarding the accommodation did not change. Initially the market sold off, but quickly rebounded. As the 3 o’clock was under way sellers began to pile up at the exits. By the close the market was well off its high limping into the close just barely in positive territory. At least the Russell 2000 finished the day with the largest percentage gains. Today’s move cannot be convincing to the bull camp as it appeared we were unable to sustain the highs. We remain mostly in an uptrend, but on very shaky ground.
We witnessed the normal volatility post release of the FOMC announcement. It never ceases to amaze us to see everyone make knee jerk reactions. When the dust settled we were left with stalling action across the board. IBD hardliners will not count this day as distribution, but when you cut to the chase it simply is not going to give you much conviction the upside has much left in it. We will certainly find out pretty quickly whether or not we can push into new high ground. Until then we will continue to work our process and move forward.
Our next headliner will be whether or not the Scottish People will vote to leave the United Kingdom. We do not have any insight into the situation or could even remotely speak with a degree of expertise on the matter. Many will certainly try to map out what will happen with the markets if the vote goes one way or another. Most arguments sound intelligent the only issue is they are simply guesses. Even “educated guesses” are still a guess. If you think you can outsmart the market be our guest. The only issue is when you try to be right all the time how will you perform over the long run? Do you know how much to risk? Entry? Exit? Majority or 99% who try will fail in time.
Tomorrow should be another fun session. Stay tuned
