Online Stock Trading | FOMC fails to inspire bulls

FOMC fails to inspire bulls


Filed Under Market Commentary |

Wall Street spasmed as the FOMC rate decision was released at 2pm EST.  Volume ran light up, through, and at the close of the day.  The lack of volume and price movement isn’t enough to extract much analysis.  For once, the market was able to predict the FOMC’s move and was shocked it had done so.  Strictly looking at price/volume action we are still pointed to move higher and that is what we really care about.

Overall put/call on the CBOE finished the day @ .86.  Bearish bets were not being placed, we’ve seen this mostly in the index puts most recently.  Index put/call index ended 1.5 where equity put/call ended at .57.  Both were considerably lower especially on the index side.  Whether or not this is signalling something will remain to be seen.  What we should be looking for how high the put/call ratio gets when the market moves higher.

I got reading “The Slope of Hope” with Tim Knight.  Here is an exerpt:

Looking at the candlestick chart of the IWM (which is the ETF for the Russell 2000), you can see a picture-perfect shooting star. My feeling is that tomorrow will be a down day, and we can get back to the business of shorting this market. 

My only issue here, Japanese candlestick analysis does not offer a high probability of success.  One comment said that normally you need a spike in volume to actually make the analysis HIGH PROBABILITY.  I am not one to clobber another blogger but I do find this a bit dangerous way to trade.

Remember to keep those losses small between 7-10%

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