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Post-FOMC Flavor

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Thinking Aloud on the Other Side of the Announcement

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What is it they say about the first move (following the FOMC) being the false move? It's right up there with Turnaround Tuesday and Contra-hour as nonsensical notions that often prove true. With that in mind, let's scratch and sniff as we edge over our weekly hump.

Consistent with what we anticipated, the language out of Washington was, in a word, careful, akin almost to my response when my ex-girlfriend used to ask me if she was overweight. (No, not you-I'm talking about my other ex-girlfriend!)

Cutting to the chase, I touched on a topic earlier this week and Mr. Practical brought it home yesterday. Policy rhetoric must walk the fine line between appeasing investors and placating holders of dollar-denominated assets. I can't help feeling like we've seen this movie before but somehow, if at all possible, the stakes are entirely higher.

Dare I say, they're...cumulative. Remember that word, Minyans, as it's served us in good stead.

Some top-of-mind vibes as we try to make sense of the world's wildest reality show:

  • Sometimes, when listening to mainstream media, I can't help but wonder if they're watching the same things we are. Then I remember that we all watched this build for many years and they didn't see the conditional elements until after the fact. Keep that in mind for the only difference between a mistake and a lesson is the ability to learn from it.

  • Yes, I know that second link is to an interview in 2003 and there was a huge, massive, monster rally in the four years that followed. Work with me please, for it's a valid point.

  • To that end, it saddens me that so many folks are following the same pundits who never saw the financial mess coming and are center stage assuring us that it's passed. People are so thirsty that in the absence of water they drink the sand-but they don't drink the sand because they're thirsty, they drink the sand because they don't know the difference. They will.

  • Not rubbing salt-that's not our style and it's a recipe for humility-I'm just communicating. My therapist says it's healthy.

  • And yes, we've all been wrong before. Different conversation.

  • Watch the dollar! Boo would argue that the failure to announce further quantitative easing is dollar positive and stimuli negative. He's a bear, we know, so take it with a grain of salt.

  • Is it me or is every close a critical close these days? S&P 2008 and NASDAQ 2000 are the obvious levels of lore in that regard and they remain overhead despite the green screens.

  • I'm listening to the song! The most bullish thing on my screen today was the 2:1 positive breadth. The most bearish thing on my screen-aside from the specter of being weaned off the government teat-are seeds of doubt in individual issues such as Bank of America (BAC), Research in Motion (RIMM) and Morgan Stanley (MS).

  • Wal-Mart (WMT) will help set the tone tomorrow and Professor Glenn (not to be confused with Ten Dan) weighs in on six reasons it could "beat." Through a technical lens, I would offer two observations. First, this is the second time in recent months it probed the 200-day moving average (and failed). Second, Please note the eight lower highs since the stock peaked last summer.

  • As a proxy for the consumer, I continue to watch the retailers. I understand that as a percentage of GDP, the government is in the process of replacing the consumer but that's another conversation altogether.

  • Final thoughts, and forgive me if they've got nothing to do with the tape and everything to do with the important stuff!

  • With that, I'm Off like the bug spray. I'll see you on the other side of the night.


R.P.

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