Don't Turn Blue

• Print
• E-Mail

A few random observations as we get ready to exhale at 2:15 p.m. Eastern time:

Liquidity will be thin and volatility fierce on either side of the announcement. Keep that in mind if you're trading and reduce the size of your positions in kind.

The first move following the FOMC's announcement is typically the false move.

The path of maximum frustration in equities may include a false breakout by the S&P 500 above 1,405 before supply begins to fill in.

The rotation out of commodities should continue, particularly if the dollar catches a bid due to the perceived pause in the Fed's rate-cutting cycle.

The oil drillers and gold miners may have double jeopardy as a function of underlying commodity weakness and retail traders often using them as a proxy for exposure to the space.

The financials enjoyed a relief rally after the market machination didn't completely seize up. At a point, investors will shift their focus to the massive issuance in the sector and its dilutive effect on earnings.

With the structural, technical and psychological metrics ready to collide, volatility is about to tick upward in a major way. The current juncture is akin to a giant game of chicken, with powerful agendas on one side and cumulative concerns on the other. Something is going to give and it'll likely happen this week."

Thank you, Todd. Now, back to holding our breaths for the rest of the morning.

Happy Trading.