Today on the Marketbeat: Bullish Chop Mode

Market #'s @ Close:

DOW: +189

S&P: +13

NASDAQ: +29

RUS2K: +16

TSX/S&P: 220

VIX: -6.12

Internals:

Core Sector List: 15/1 to the bulls

NYSE

BREADTH: 5/1 Positive

TRIN: 0.94

A/D LINE: 1900

NASDAQ

BREADTH: 3/1 Positive

TRIN: 0.97

A/D LINE: 1400

Today was primarily a choppy inside day. For the most part it was a bullish day with all of the broad indices closing higher today along with the VIX losing 6 pts to bring it a little more back down to earth. The internals showed some bullishness today with the Breadth closing up 5/1 on the NYSE and 3/1 on the NASDAQ. The A/D LINES also tacked on some decent gains closing up 1900 and 1400 ticks on the NYSE and NASDAQ respectively. 

Today on the Marketbeat: The Fed delivers, A day Late of the Monster Truck Rally

Market Numbers @ Close:

DOW: -74

S&P: -11

NASDAQ: +7

RUS2K: +8

TSX/S&P: +350

VIX: +2.54

Internals:

Core Sector List: 8/7 to the Bulls

NYSE

A/D LINE: +700, -1000 ticks in last 15min bar

BREADTH: 1.1/1 Positive

TRIN: 1.42

NASDAQ

A/D LINE: +500, -700 ticks in last 15bar

BREADTH: 1.2/1 Negative

TRIN: 1.73

The Fed delivers, A day Late of the Monster Truck Rally

So with the FOMC anouncement out of the way, we all can breath a sigh of relief that they didn't drop the rates into obivion, only 0.5% base point cut, with another .25% cut being priced in for November, but that is a topic for another post. The subject of this post however is to cover todays FOMC meetin and what kind of effect i had on the markets today. 

So the market opened up today, not a gap but it was up on the open and essentially chopped its way into the afternoon, with brief periods of buying pressure during the lunch hour. Fastforward to 2pm EST, The Monster truck is in the house, or did it get the dates wrong and come one day early? The market action following the FOMC meeting was borderline minimal. There was the initial shock/shake out, follwed by some buying pressure where we came only points away from pegging R1 on the YM and ES. However, in the last 15min bar of the day, there was a HUGE marketwide selloff into negative territory. To gauge this last minute selloff/profit taking one needs only look at the A/D Lines.

Under the Hood, is where the story gets interesting. During the last 15 minutes of the day today, the NYSE was up 1700 ticks on the A/D line, only to lose over 50% of that in the last 15 minutes, closing at +700 ticks up. The Nasdaq was very similar up 1200 ticks only to close at +500 ticks. The Breadths closed around parady 1.1/1 Positive on the NYSE and 1.2/ Negative on the Nasdaq. While the Vix tacked on a couple points. 

Chart of ES Futures Today [Click to enlarge]

Notice the market action following the FOMC anouncement. Slight knee jerk, followed by a small bullish move towards R1, only to miss the pivot by a couple points then drop down below the PP due to some vicious selling. As of writign this post 4:45 PM the Markets have regained some of drop after hours. 

Today on the Marketbeat: 900 pt Rally Before the FOMC...The Monster Truck comes early

Market #'s @ Close:

DOW: +891 (10.9%)

S&P: +91.5

NASDAQ: +143

RUS2K: +35

TSX/S&P: +614

VIX: -13.6

Internals:

Core Sector List: 16/0 To the Bulls (1/2 up 10% or more)

NYSE

BREADTH: 18/1 Positive

A/D LINE: +1300

TRIN: 0.3

NASDAQ

BREADTH: 7/1 Positive

A/D LINE: +1200

TRIN:

Chart of Todays Price Action on the ES (S&P500 Futures) [Click to enlarge)

(Notice how the break of the days high sparked off the rally, which then took a 15min break and form a pennant which broke out with alot of strength to the upside.)

Wow, is one word that could sum up todays intra-day Market activity. Prior to 2pm est, the YM and ES futures were channeling around between pivots like has been the norm for the past couple days. However, with the looming FOMC anouncement, due sometime tomorrow, the market reacted to somethign today around 2pm, and this reaction was one that the lonely bulls have been waiting for. Post 2pm est, the Market moved nearly 500 YM points, and 55 ES points. With the internals agreeing with this move fully, could this be a start to the bottom. As educated traders, we do take this day with a grain of salt, and are not ready to call it the bottom, but we will digest this strength accordingly, like I mentioned yesterday with a close above 2 on the NYSE trin, we had a 80% chance of seeing a rally day today, although I dont think anyone could have predicted it would be as strong as it was today.

Under the hood like I mentioned the Internals were screaming bullish action today. We saw an early gap up from last nights market action overseas. This could have been a foresight into todays big rally. The Trin trended downwards for most of the day, minus when the gap filled before the rally sparked off aroudn 2pm. After 1:45 on the Trin it trended lower than Bushes approval rating. The A/D Lines tacked on some solid gains while the Breadthes closed at 18/1 Positive (NYSE) and 7/1 Positive (NASDAQ)

Starting From Scratch:

As we discussed yesterday in how to prepare for an FOMC anouncement and use it to your advantage to steer clear from added volatility and risk. Today I will continue this discussion as the FOMC meeting anouncement is due sometime tomorrow around 2pm, I will try to have a live update on the situation while it unfolds, but I suggest you stick with a live feed like the shadow trader or at worst CNBC. Once the news hits the wire, I feel a good practice for any new to these anouncements is to set up a chart of the DIA / SPY or /YM & /ES  and watch how the price action unfolds in relations to what is said, and how it is said. Ive done this for the most part of the last 2 yrs durign these meetings and its always interestign to see the big spike of initial action followed by a calming of the markets as it has digested all of it then priced it in. 

Remember, FOMC anouncement WEDNESDAY 2PM, make sure you adjust your parameters accordingly because as we saw today, it could be a wild wild ride. 

COMING SOON: CURRENCY !!!

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.