Todd Harrison: Janet Yellen Supercharges Quarter-End Performance Anxiety

By Todd Harrison  MAR 31, 2014 11:06 AM

Multiple crosscurrents compete for our collective attention.

 


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She cuts you once, she cuts you twice but still you believe. The wound is so fresh you can taste the blood, but you don't have strength to leave.-- Billy Joel.

Janet Yellen, Chairwoman of the Federal Reserve, did her part this morning to supercharge quarter-end performance anxiety. 

In mentioning the economy will need "extraordinary support for some time" and "QE (quantitative easing) taper doesn't mean reduced stimulus commitment," she counter-balanced her recent remarks alluding to a rate hike in the spring of 2015.

These comments, on top of the Putin news late Friday that he is seeking a diplomatic solution -- take that with a grain of salt -- is the tailwind to today's tape. 

Given the updraft,  the banks and S&P (INDEXSP:.INX)  are above support while the Nasdaq (INDEXNASDAQ:IXIC), Dow Transports (INDEXDJX:DJT), and Russell 2000 (INDEXRUSSELL:RUT) remain below resistance as we edge toward the last trading day of the first reporting period in 2014. 

As I write this missive, market breadth is 3:1 positive although some cracks have appeared in Tesla (NASDAQ:TSLA), Twitter (NYSE:TWTR), Netflix (NASDAQ:NFLX) and Keurig Green Mountain (NASDAQ:GMCR), which are trading to the downside.  My favorite cannabis proxy, GW Pharmaceuticals (NASDAQ:GWPH), is struggling to hold the flat line after getting thumped on Friday. 

And, we have the VXO (INDEXCBOE:VXO) at 12-half -- a kitten's whisker away from all-time support-- where we've seen bounces in the past.  Volatility is the opposite of liquidity and if the Fed reduces liquidity from the system, it stands to reason that volatility will uptick--which could create a bumpy ride for stocks. 



Random Thoughts:
 

R.P.

Twitter: @todd_harrison



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Position in GWPH.

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 todd@minyanville.com.

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