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Todd Harrison: What to Watch in the Post-FOMC Marketplace
The reaction to the news will be more important than the news itself.
Todd Harrison    

Editor's Note: Todd posts his vibes in real time each day on our 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.

Janet Yellen stepped on stage yesterday and learned a real-time lesson on the gravity of her every syllable. In mentioning that a "considerable" period (between the end of QE, presumed to be the fall, and the first rate hike) is six months, she unwittingly triggered sell orders from the "ready-fire-aim" crowd.

The tape cascaded lower and registered a low tick of S&P (INDEXSP:.INX) 1850.35 -- which is a crazy coincidence for those who believe that technical analysis doesn't matter -- and bounced in kind as the bulls defended their turf and made a bet that Federal Reserve officials would backtrack and qualify the remarks, as Federal Reserve officials tend to do.

Sometimes you can learn a lot just by watching, and the price action that stood out to these eyes yesterday was the relative traction in the financials in the face of supply.

We've spent a lot of time identifying the technical road map for risk -- I'm a big believer that TA is a better context than catalyst -- and an upside breach of BKX (INDEXSP:BKX) 71.50, along with TRAN (INDEXDJX:DJT) 7600, will provide technical affirmation of the recent breakout in the S&P, NDX (INDEXNASDAQ:NDX), and Russell (INDEXRUSSELL:RUT) so long as they hold 1850, 3640, and 1182 respectively.

I've included the charts of the BKX and TRAN below





What else? Glad you asked. Here are some Random Thoughts, in no particular order:

  • It would seem to me that China is trying to quietly swallow bad debt. Three thoughts there: First, much of the debt thus far has been digestible, which is why we've heard nary a burp. Second, the government has seemingly circled its wagons around the banks in an effort to guard against counterparty contagion. Third, China is acting as a buyer of last resort of raw materials that have been used as collateral in financing deals. Whether its actions help or hurt the global dynamic -- or both, as a function of timing -- remains to be seen.
  • Quarter-end is eight sessions away, and that isn't lost on the animal spirits that lagged their peers last year. While invisible catalysts are always tough to game, we know that in periods of intense performance anxiety, the buyers are higher and the sellers are lower. Weave in all of the technical inflection levels mentioned above and that's a recipe for whippage.
  • Germany is also trading above the all-important DAX (INDEXDB:DAX) 9000 level. We've spoken of the likelihood of a bounce into that zone as well as what might happen if it broke. See it, even if you choose to ignore it.
  • Gold had a 17% run off the December 31, 2013 low and has lost a quick 5% this week. As such, I wanted to update our gold vs. S&P chart for those interested; the chasm is still pretty wide.

 
  • Good luck today, and as always, I hope this finds you well.
R.P.

Twitter: @todd_harrison

Follow Todd and over 30 professional traders as they share their ideas in real-time with a FREE 14 day trial to Buzz & Banter.
No positions in stocks mentioned.

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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Todd Harrison: What to Watch in the Post-FOMC Marketplace
The reaction to the news will be more important than the news itself.
Todd Harrison    

Editor's Note: Todd posts his vibes in real time each day on our 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.

Janet Yellen stepped on stage yesterday and learned a real-time lesson on the gravity of her every syllable. In mentioning that a "considerable" period (between the end of QE, presumed to be the fall, and the first rate hike) is six months, she unwittingly triggered sell orders from the "ready-fire-aim" crowd.

The tape cascaded lower and registered a low tick of S&P (INDEXSP:.INX) 1850.35 -- which is a crazy coincidence for those who believe that technical analysis doesn't matter -- and bounced in kind as the bulls defended their turf and made a bet that Federal Reserve officials would backtrack and qualify the remarks, as Federal Reserve officials tend to do.

Sometimes you can learn a lot just by watching, and the price action that stood out to these eyes yesterday was the relative traction in the financials in the face of supply.

We've spent a lot of time identifying the technical road map for risk -- I'm a big believer that TA is a better context than catalyst -- and an upside breach of BKX (INDEXSP:BKX) 71.50, along with TRAN (INDEXDJX:DJT) 7600, will provide technical affirmation of the recent breakout in the S&P, NDX (INDEXNASDAQ:NDX), and Russell (INDEXRUSSELL:RUT) so long as they hold 1850, 3640, and 1182 respectively.

I've included the charts of the BKX and TRAN below





What else? Glad you asked. Here are some Random Thoughts, in no particular order:

  • It would seem to me that China is trying to quietly swallow bad debt. Three thoughts there: First, much of the debt thus far has been digestible, which is why we've heard nary a burp. Second, the government has seemingly circled its wagons around the banks in an effort to guard against counterparty contagion. Third, China is acting as a buyer of last resort of raw materials that have been used as collateral in financing deals. Whether its actions help or hurt the global dynamic -- or both, as a function of timing -- remains to be seen.
  • Quarter-end is eight sessions away, and that isn't lost on the animal spirits that lagged their peers last year. While invisible catalysts are always tough to game, we know that in periods of intense performance anxiety, the buyers are higher and the sellers are lower. Weave in all of the technical inflection levels mentioned above and that's a recipe for whippage.
  • Germany is also trading above the all-important DAX (INDEXDB:DAX) 9000 level. We've spoken of the likelihood of a bounce into that zone as well as what might happen if it broke. See it, even if you choose to ignore it.
  • Gold had a 17% run off the December 31, 2013 low and has lost a quick 5% this week. As such, I wanted to update our gold vs. S&P chart for those interested; the chasm is still pretty wide.

 
  • Good luck today, and as always, I hope this finds you well.
R.P.

Twitter: @todd_harrison

Follow Todd and over 30 professional traders as they share their ideas in real-time with a FREE 14 day trial to Buzz & Banter.
No positions in stocks mentioned.

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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Daily Recap
Todd Harrison: What to Watch in the Post-FOMC Marketplace
The reaction to the news will be more important than the news itself.
Todd Harrison    

Editor's Note: Todd posts his vibes in real time each day on our 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.

Janet Yellen stepped on stage yesterday and learned a real-time lesson on the gravity of her every syllable. In mentioning that a "considerable" period (between the end of QE, presumed to be the fall, and the first rate hike) is six months, she unwittingly triggered sell orders from the "ready-fire-aim" crowd.

The tape cascaded lower and registered a low tick of S&P (INDEXSP:.INX) 1850.35 -- which is a crazy coincidence for those who believe that technical analysis doesn't matter -- and bounced in kind as the bulls defended their turf and made a bet that Federal Reserve officials would backtrack and qualify the remarks, as Federal Reserve officials tend to do.

Sometimes you can learn a lot just by watching, and the price action that stood out to these eyes yesterday was the relative traction in the financials in the face of supply.

We've spent a lot of time identifying the technical road map for risk -- I'm a big believer that TA is a better context than catalyst -- and an upside breach of BKX (INDEXSP:BKX) 71.50, along with TRAN (INDEXDJX:DJT) 7600, will provide technical affirmation of the recent breakout in the S&P, NDX (INDEXNASDAQ:NDX), and Russell (INDEXRUSSELL:RUT) so long as they hold 1850, 3640, and 1182 respectively.

I've included the charts of the BKX and TRAN below





What else? Glad you asked. Here are some Random Thoughts, in no particular order:

  • It would seem to me that China is trying to quietly swallow bad debt. Three thoughts there: First, much of the debt thus far has been digestible, which is why we've heard nary a burp. Second, the government has seemingly circled its wagons around the banks in an effort to guard against counterparty contagion. Third, China is acting as a buyer of last resort of raw materials that have been used as collateral in financing deals. Whether its actions help or hurt the global dynamic -- or both, as a function of timing -- remains to be seen.
  • Quarter-end is eight sessions away, and that isn't lost on the animal spirits that lagged their peers last year. While invisible catalysts are always tough to game, we know that in periods of intense performance anxiety, the buyers are higher and the sellers are lower. Weave in all of the technical inflection levels mentioned above and that's a recipe for whippage.
  • Germany is also trading above the all-important DAX (INDEXDB:DAX) 9000 level. We've spoken of the likelihood of a bounce into that zone as well as what might happen if it broke. See it, even if you choose to ignore it.
  • Gold had a 17% run off the December 31, 2013 low and has lost a quick 5% this week. As such, I wanted to update our gold vs. S&P chart for those interested; the chasm is still pretty wide.

 
  • Good luck today, and as always, I hope this finds you well.
R.P.

Twitter: @todd_harrison

Follow Todd and over 30 professional traders as they share their ideas in real-time with a FREE 14 day trial to Buzz & Banter.
No positions in stocks mentioned.

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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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