The FOMC tomorrow is likely to repeat its pledge to keep interest rates near zero for an “extended period,” economists say, because inflation is slowing and unemployment remains near a 26-year high.
By Scott Lanman and Steve Matthews, bloomberg.com, 12/15/09
The FOMC announcement for the December 15-16 FOMC policy meeting is expected to leave the fed funds target rate unchanged at a range of zero to 0.25 percent. However, traders will be watching to see if the "extended period" language is qualified with any additional wording regarding the future path of the fed funds rate. Traders also will look for updates on the Fed's view of the recovery and on the Fed's plan for unwinding balance sheet expansion.
nasdaq.com, 12/15/09, FOMC Meeting Announcement
Visa (ticker symbol: V) soared higer on an upgrade today breaking short term resistance ($83.40) to make gains of over 3%.
A takeover deal of XTO Energy (XTO) by Exxon Mobil Corp (XOM) spiked XTO stock price by more than 14% & dropped XOM stock slightly more than 4%.
Citigroup (C) announced plans to repay the US government for their share of the TARP money dropping the stock more than 6%.
Angie C.
Follow me on twitter: www.twitter.com/WTV_Angie
Many traders give up long before it is really over. You keep working to learn market until you can't anymore. The only way you can fail is to quit.
Oregon’s Democratic Representative Peter DeFazio has proposed a new bill (HR 1068) which I’ve seen by both titles "Let Wall Street Pay for Wall Street's Bailout Act of 2009" and "Let Wall Street Pay for the Restoration of Main Street Act of 2009." This representative wants Wall Street to pay for the collapse of the market and shady practices that have lead to financial discrepancies. But I don’t get this… they find it acceptable to bail out the banks, but it’s necessary to punish the investors!?! It almost makes me livid to think that someone really thinks this makes sense! I find it amazing that there is so much finger pointing going on up there on Capitol Hill. I always learned that when you point a finger at someone, you find 3 more pointing back at you.
This proposal is looking to enforce a 0.25% tax on transactions including buying and selling of stocks, options and futures. This money will be used to pay back the money used to bail out banks and troubled businesses.
Let’s step back and look at this “objectively.” The government decides to give these “troubled” businesses money to bail them out (which you and I funded) and now they’re going to tax traders (you and I) to replace that money which you and I already paid for. Does anyone else see something wrong with this picture?
Well, if you feel the same as I do, I would ask that you sign one or all of the petitions below. We have to tell Congress, our Representatives and the Government that enough is enough!
http://www.rallycongress.com/greentradertax-traders-association1/
http://www.rallycongress.com/no2tradertax/1536/tell-congres-to-block-trader-tax/
People all excited when they look at the charts at the first part of the market or when a news event hits and a large move is reflected in the charts. What they forget is that the move is so quick as to be almost imposible to capture which leads to unneeded loses. Keep your emotions for your Christmas party.
As the market pulls back today after a very strong run up to resistance, I'm looking at the following points for immediate support. When I say immediate support, I'm expecting a "pause" from the market at these levels before continuing or bouncing.
$DJI (Dow) - $10,100
$SPX (S&P 500) - $1,080
Angie C.
View Disclaimer
I often use the Open Interest of the Indices or their ETF's to gauge market sentiment. While Open Interest does not depict specific market direction, when I keep in mind that large institutional traders will often use Options as a hedge or insurance, I like to use high levels of Open Interest to gauge sentiments of support (Puts) and resistance (Calls).
- Interestingly enough, there is the most open interest on the S&P 500 ($SPX) at the $1,050 strike for both calls and puts for November expiration.
- The SPY, ETF for S&P 500, shows the heaviest amount of Put Open Interest at $95, $100 and $105.
- The $95 & $100 levels used to be support levels as the market was climbing. This makes sense since we often see these levels around whole numbers ending in "5" and "0." The reason the open interests haven't come down is because as with most insurance, when the eminent danger is no longer looming or the coverage period has elapsed, you don't get a refund- you have given up the premium. But that was the intent. To get to expiration and hopefully lose the premium because there was no disaster to cash in on. So we can use the more recent support level of $105.
- Calls are showing the highest open interest levels at $110 strike. This is the logical level of resistance since this is the last level we've pulled back from.
So what does all of this help me to determine? In combination with the trends on the Wizemen and the higher highs developing on the smaller trend lights, I am interpreting that there is bullishness in the current market.
Could that be why the S&P 500 is up 20 points and the Dow is up close to 200 points?
Happy Trading!
Angie C.
Follow me on twitter: www.twitter.com/ac_trader
No matter how good we are at analyzing this market, it can always throw us a curveball. It's important to remember to take what the charts give us, match our trades to our risk tolerance and not get ahead of this market, no matter how tempting!
- Take what the charts give you!
- Stick to your trade plan!
- Match your trades to your risk tolerance!
Happy Trading!
Angie C
Follow me on Twitter: www.twitter.com/ac_trader
Remember that trading is a continous journey without end. We never understand that market. We continue to findout where it is now.
When trading you can only deal with right now. You must be able to trade without yesterday's emotions causing problems today.
