Wednesday, September 21, 2016
Fed Friday to Continue to Be Held on Wednesdays
Yesterday, despite rising inflation pressures, Janet Yellen shattered expectations and announced that the infamous Fed Fridays will "hold steady" and continue to be conducted on alternate Wednesdays during months ending with the letters "r" or "y." Plus any other letters of the alphabet, with the notable exception of "epsilon."
"Fed Fridays have been a long-standing tradition of this Fed," Mrs./Ms./Mr. Yellen was quoted as saying, "and after reviewing the data, we believe that 'Fed Friday Wednesday' best embraces the dual mandate of the Fed to hold conferences on both Friday and Wednesday." Reporters left scratching their heads, while Mr./Ms./Dr. Yellen the III, PhD. could later be seen chuckling to him or herself.
Thus the Fed will still announce what it plans to do about global warming (or whatever) later this afternoon, assuring that today is destined to go down in history as "the day the Fed announced something, and the market was thrilled or disappointed, depending on who (or possibly 'whom') you ask."
*Disclaimer: Sleep deprivation has become a way of life for me lately, so I cannot be held accountable for any of the preceding paragraphs.
Moving on to the charts, bulls and bears both refused to do much of anything for the past couple days, due to mounting confusion over what day actually constitutes Fed Friday. This created a trading range, because, as numerous talking heads are fond of saying: "the market hates uncertainty." And we know that must be true, because the market declines, trades sideways, and/or rallies during times of uncertainty, which basically constitute every minute of every day of every year. When's the last time anything was certain?
I'm going off on a complete tangent here, but stupid anecdotal statements like "the market hates uncertainty" only seem true because we focus on the "uncertainty" when the market's declining, and we ignore it when the market is rallying. It's one of those "you find what you're looking for" sort of things. It's like when you start considering buying a particular car model, and all the sudden you notice there are DOZENS of people driving that particular model around town -- of course, we realize it's not that suddenly more people driving that particular car, we're simply noticing all of them now because we're paying attention to something we weren't paying attention to before.
Start paying attention to how often the market rallies during times of uncertainty, and you'll see what I mean about "the market hates uncertainty" being one of those statements that sounds smart, but kind of isn't. It's something talking heads say because it sounds more professional than saying, "I have no clue why the market went down today, Neil. Maybe due to solar flares?"
Anyway, in other news, CarMax dropped nearly 6% in the premarket today, after their CEO announced to disappointed investors that the famous lip balm company is actually called Carmex, and to please stop asking.
And in still other news, clearly I need to lay off the coffee tonight.
Alright, enough tomfoolery, let's look at a chart!
As we can see on the chart above, clearly the Fed needs to address the Selfie Epidemic before it worries too much about interest rates. I'll be waiting with baited breath to see how they plan to handle this. There does at least seem to be a consensus in the investing community, as I've recently learned that 9 out of 10 pundits recommend Trident.
Looking at a chart of SPX (finally, sheesh, thought he'd never shut up), we can see that SPX very briefly broke above 2152, but was unable to sustain the breakout -- thus essentially leaving everything unchanged from Monday's update. (See, in all that preceding silliness, I was trying to give you added value in the form of a chuckle and/or a grimace, since there really wasn't much to say about the market today.)
And finally, today's Photo of the Day (because: why not). I shot this yesterday morning at sunrise, in what is essentially an extension of my yard at the new house:
In conclusion, there's really nothing to add to Monday's update, except to note that with the combination of the Fed announcement today and the existing coiling pattern, things could get even whippier and harder to trade, and an initial fake-out move from this pattern might even fit the bill. I'm still inclined to think that bounces should be sold against key levels unless and until the market shows it can sustain a break over the near-term resistance at and around those levels. Trade safe.
Posted by PretzelLogic at 3:01 AM