Friends,
Traders waited with baited breath for the Fed release today. We basically got the “twist” that we were expecting, where the Fed will buy longer maturity bonds and sell shorter maturity bonds. The problem is that the Fed’s statement certainly ramped up the verbiage on the global slowdown scenario, and stocks which were down before the statement, continued to fall into the close. The losers were the financials, industrials and materials, basically everything that needs a good economy to flourish.
The Dow Jones Industrial Average fell 283 points and the S&P 500 fell 35 points to close at 1166. We were suspicious of last week’s rally and have suspected that we were not done testing the August lows, and today’s action indicates that we still have some work to do. Has much changed since last Friday? No it has not, but investors continue to be inundated with difficult news, whether here at home or abroad. The important thing for us, is to monitor the technical levels. We continue to fail to get decisively through the 1205 to 1215 level on the S&P on the upside and now we will see if we can hold 1140 and eventually 1101 on the downside.
Today’s action really did not make any more sense than last week’s action, so let’s see what tomorrow brings.
Have a nice evening everyone.
