Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
The FOMC announcement was as expected – nothing. I do expect a lot of hyperventilating over the FOMC minutes when they are released in a few weeks since they will be talking about “additional” steps which really (again) won’t be anything additional at all as it will be a replacement function – but the algos who scan headlines in microseconds won’t know that so watch for giddiness. Even though you can see how much QEinfinity has done for markets the past 5 weeks. It’s Pavlovian.
As for today’s action despite the market near flat or slightly green much of the day it’s in favor of the bears. There was never any attempt on yesterday’s gap down (to fill it) other than in the opening minutes of the day. That gap down also happens to top at April 2012 high levels so this is the second full day below that level barring “one of those moments” in the closing hour where a magical 10 pt S&P rally happens out of thin air – we’ve seen one of those just days ago. For now, former support now appears to be resistance.
So the quite oversold condition the markets exited with yesterday now becomes somewhat less so. If the concept is foreign just turn the chart upside down – after a big move up a bull wants to see sideways consolidation. Now we see the opposite happening, after a big move down this is consolidation. It seems bulls have to wait on Apple and hope the stock repeats what it did in April now. That or lower prices such as the obvious 1395 level might bring in some real buyers for a trade at least.
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