Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Todd Harrison: My Thoughts on the FOMC Announcement and the Market

By

Plus, I'm thinking about a Twitter and Facebook trade.

PrintPRINT
This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

The reaction to the Federal Open Market Committee's announcement today is par for the course. Remember that the first move following an FOMC announcement is typically the false move. See the Federal Reserve press release here.

Looking at financial stocks, the key level to watch on the KBW Bank Index (INDEXSP:BKX) is 67. Not only is 67 the BKX's 200-day moving average, it's also a triple bottom.

I haven't made the trade yet, but a long Twitter (NYSE:TWTR) trade and short Facebook (NASDAQ:FB) trade is starting to crystallize in my mind's eye.

New Federal Reserve chairpersons typically have their feet put to the fire shortly after they're sworn in -- Janet Yellen has that to look forward to. The bulls will argue that their ability to hold the S&P 500 (INDEXSP:.INX) near all-time highs despite the 20%, 30%, and 40% haircuts in high-beta stocks is an overt positive. The bulls may be right, but the market story continues to unfold. I, for one, continue to respect the Smart Money Flow Index chart that I highlighted this morning on Minyanville. The Smart Money Flow Index shows whether "smart" (or experienced) investors and traders are buying or selling on a day-to-day basis. A divergence between the Smart Money Index and major indices such as the Dow Jones Industrial Average (INDEXDJX:.DJI) warrants caution.

As always, I hope this finds you well.

R.P.

Twitter: @todd_harrison

< Previous
  • 1
Next >
No positions in stocks mentioned.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE