Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
The waiting is the hardest part...
The entire (investment) world is chomping at the bit for Big Ben to chime at 2:15 p.m.; here are some things to keep an eye on following the announcement.
: It's been under pressure, -23% since October with a persistent pattern of lower highs. One would think
that a fair amount of tapering has been priced in; the yellow metal needs to hold $1,350 to maintain the emerging attempt at 'higher lows.'
2. The Financials
: Note the flag pattern in the BKX
INDEXDJX:BKX); these patterns tend to resolve in the direction of the prevailing trend (in this case higher), but that's not written in stone. Goldman Sachs Group Inc
(NYSE:GS), in particular, should be on your radar; it's been a tremendous single-stock tell.
3. Market Internals:
They'll lag, as futures will provide the quickest exposure for active
traders, but this will help us determine 'migration vs. rotation,' which will help shape the forward prognosis.
4. The Dollar:
A higher dollar should be a headwind for stocks, and vice-versa, all else being equal (which it rarely is).
5. S&P 1650:
This is 'the' pin into Friday, and it will be a magnet until then. The ability of the tape to meaningfully meander from that strike will offer a stealth clue. The further away it moves, the less attraction it will provide into the back-half of the week.
For my part, my pad is pared with a short bias; long some single stock situations and
some SPY December puts, and I'll trade around that as a function of time and price. And remember, the first move is typically the false move after the FOMC!
Pennant in the piggies!:
Position in SPY.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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