Janet Yellen’s rhetoric all but points to a rate hike in two weeks at the next Federal Reserve meeting. Today’s Beige Book revealed moderate growth in the economy and the Federal Reserve believes it has hit its employment mandate. Sellers took to the market once Yellen’s talk was complete as well as the release of the Beige Book. At the end of the day the S&P 500 was down more than a percent along with Russell 2000. Today’s action is certainly a red flag for this market. As volume spiked on the session across the board we have a pretty big distribution day on our hands. What we need to avoid is back to back days of distribution ahead of Friday’s job report. While this market is still in an uptrend today was a big blow.
At the end of the day we have to stick to our strategy. Just because one day happens to be a bad day it does not mean we lose our discipline. While it does not look for this uptrend we have seen in the past this market’s ability to turn on a dime. Since 2009 there have been far too many times this market while looking like it was on the brink of disaster turn around and make new uptrend highs. Will it happen this time? No one knows for certain, but we cannot rule out the possibility. We have our stops in place if this market decides to continue to fall. Stay disciplined.
NFLX enjoyed a solid session today, but closed off its high of the day. Volume was just above average. AMZN has seemingly stalled out here and is churning. GOOGL is still hanging onto its 10 day, but failed to hold onto its gains today. FB continues to hang in there today and continues to act well. YHOO had a great day moved by news the company is looking to sell assets. BABA is one of those assets and it too acted well today. Our big cap leaders continue to act okay and there is nothing alarming just yet.
We continue to forge forward managing risk and cutting losses.
