We all know what happened with yesterday's Fed statement(s) by now and have had time to sit back and try and make sense of not only what was literally said, but how to interpret words and charts going forwards, but taking the word “patience” out of the picture for the near future adds more mystery back into the mainstream.
Not only do we try and read between the lines and guess if and when the Fed decides to hike rates, but with the Dow having triple digit moves 8 out of the past 9 days, capped off with yesterday’s almost 400 point Dow reversal from early morning lows, we view yesterday's action as a move that puts us (indices/sentiment) back on track for better action with the Russell, IWM, making all-time highs. Especially with yesterday's rally being slow and methodical. Europe, on the whole, is up the most since 2000, coupled with crude prices being the lowest since 2009. Also for the VIX believers granted in hindsight, few will argue that there wasn’t “fear” out there, just managers and institutions rotating money.
Recently, the markets have seen the most Volatility from non-equity asset classes being the Dollar/Gold/Crude and with the 10-year yielding below 2% again, stocks, either domestic or more so lately international, seem to be the only game in town.
As traders at Tradeview Markets, there has been tremendous opportunity for both intra-day trading as well as some swing trades. ORCL/FDX/ADBE/MGM/DD/LL have been good stocks to trade for us with range, volume and good price action. Others include etfs such as XLE and ERX, GLD and EUO.
It may take some time to absorb yesterday's move and let the market settle keeping in mind that Dow closed above 18k and the Nasdaq briefly touching the 5000k mark again. Both psychological levels that also need time to be digested after the “run” we have had. Until then traders will continue to watch the dollar and crude oil until the market gives us confirmation and confidence in stock prices and indices.
