The FOMC interest-rate decision didn't contain any surprises, but it did give the sellers a little nudge to lock in some gains. The bearish spin on this action is that, when we fail to rally on generally good news, it means it is already priced in and we have nowhere to do but down.
The problem with that argument is that the FOMC news really can't be characterized as particularly good. The fact that the Fed said rates will stay exceptionally low for an extended period of time means it still has plenty of worries about the health of the economy despite some optimistic language. If they really believed the economy was heating up, there would be some hawkish comments.
Overall, it is just a lot of noise and doesn't do anything to change the big picture. We are still churning right around the highs of the year and can't seem to generate any real vigor. On the other hand, the bears are making even less progress, as we hang in the upper range of the recent trading range.
Tomorrow, we should see the pricing of the C secondary offering. That may help the banks find some support. There has been a lot a stock to digest in that sector, and it should be no surprise that the group has underperformed recently.
The dollar was weak early, which helped push up oil and gold. But after the Fed announcement, it bounced back and closed around flat. We need to keep a close watch on the greenback as a potential driver for our next move.....
Overall, the market continues to act in a healthy manner. If there is a negative, it is the fairly high level of complacency and expectations for positive seasonality. But it is impossible to use that sentiment to time a turning point in this market with any precision.
The bulls continue to have the benefit of the doubt. Until we see more negatives emerge, I see little reason to be highly bearish right now.....
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