Today on the Marketbeat: The Sell before the Bell

Market #'s at Close:

DOW: -203

S&P: -15

NASDAQ: -25

RUS2K: -15

TSX/S&P: -590

VIX: +.44 (ten point range)

Internals:

Core Sector List: 15/1 To the Bears

NYSE

a/d line: - 1800 ticks

Breadth - 7/1 Negative

Trin: 2.05

NASDAQ:

a/d line: -1600 ticks

Breadth - 4/1

Trin: 0.94

Today on the Marketbeat: The Sell Before the Bell

As we draw closer and closer to the 2008 Elections, the level of indecision in the political field as well as the markets grows. Obama vs McCain = Bulls vs Bears. Today the market pulled another gap down, which was quickly filled as soon as the market got its bearings. The full fill occured before noon (11:45) and continued to pull up, even putting the broad exchanges in the green briefly. However, as is a growing theme in recent weeks, the strength is sold into, and some. The ES's for example pegged the R1 pivot  and was quickly flushed back down to the Pivot Point, which held as support up until the late day flush out near S1. Whats interesting about the R1 Pivot touch is that we saw a +1000 Tick reading at the same time the price action pegged the pivot, Which is always a good sign of the internals doing their jobs. 

Chart of SPX (Click to enlarge):

Under the hood, as we discussed previously, the Tick was mixed intra day, but did give some +/- 1000 tick readings that helped traders get in or out at opportune times. The Breadth looked alot like a DNA double helix today, up until 3PM when the market began its push down. The A/D lines tacked on some more losses with the NYSE tacking on -1800 ticks and the NASDAQ tacking on -1600 ticks. The trin closed above 2, so we might want to keep our eyes open for a gap up tomorrow or possibly a bullish morning snap up. The key is to keep all possibilities open, and let the market show its hand

Chart of Internals + Futures (Click to enlarge)

Starting from Scratch:

Today I would like to discuss THE FOMC Meetings. When I first started trading, I knew little about how an FOMC meeting could have an effect on my trading, however, that quickly changed. Through my education service (investools) over a course of a couple meetings they covered it live, giving me an in depth look at how its not only what they say but how they say it that affects the markets ebbs and flows. Another key thing Ive learned about FOMC meetings, is unless your an investor not concerned with the daily ups and downs of the market, You want to make sure your either flat or watching your positions very closely during the time of the meeting, personally, i like to stay flat until the initial volatility cools down (which usually occurs 20-45 min after the announcement). What this does, is take un-needed risk out of your way, especially in a market today that could turn 180 degrees on a dime and drop 30 ES points in a heart beat. 

The more you can remove yourself from unneeded volatility and risk the better for your portfolio (and blood pressure). Listening to the Shadow Trader live during the meeting is a good way to eliminate all the bells and whistles stations like CNBC like to add to events like that. As to pump their ratings. Keeping a cool head and knowing your options are key aspects in a market like this, on a day where the way words are spoken are what dictate the price action.