Post Fed stock market action lived up to its past history with a big move after the Fed Statement was released. Sellers were able to knock the market into negative territory just after 11amEDT. However, buyers cheered the FOMC statement as well as Janet Yellen’s testimony following the release. One downside on the session was the inability for the market to hang onto its gains. We continue to see weak closes and thus, lead us to believe more sideways action should be expected. Whether or not we continue to see this sloppy action remains to be seen and we have a plan to deal with it. Now, with the FOMC out of the way until another 6 months we now get to see what happens with Greece. The market is mixed right now and we continue with our long bias for now.
Perhaps another knock on the session was the action in small cap stocks. The group has been a leading, but today was just not their day. It is just one day, but any continued weakness relative to the broader market would certainly raise our eyebrows a bit. One day does not make a trend. We will continue to keep it as a watch point.
We do have a long bias in our portfolios simply because the price action in many different individual stocks remains positive. It would be a welcomed scenario to finally see this market push into new high territory and run for a while. It is just not in the cards at the moment. AAPL continues to struggle with its 50 day moving average. Volume has favored the downside as of late and since the stock is a large portion of the Dow and NASDAQ it makes you wonder if these indexes can push higher without AAPL.
Janet Yellen’s testimony was interesting to see the headlines flashing from it. For example the FOMC uses a wide range of data points. Talk about not knowing what to look at it. It is very much like a Technical Analyst with a 1000 trend lines, oscillators, and whatever else to analyze the market. We only need price. Another interesting was the headline regarding the economy reach full employment. Does this account for those who are retiring and dropping out of the labor market completely? In the end, it does not matter as long as we have a robust risk management system and follow the trend we will come out on top. Unfortunately, for those who choose to head down the Analysis Paralysis path will only lead to disappointment over time.
Disappointing earnings out of ORCL will certainly put pressure on the NASDAQ tomorrow. The stock is off more than 7% after missing revenues. Once again currency headwinds are proving to be tough on earnings reports.
The slop and chop continues. Stick with the process.
