Comment: The FOMC announcement went much as expected. No QE3. The Fed does ?The Twist?, i.e., sells short term treasuries and buys long term treasuries.
The strategy was well anticipated. Stock traders sold the news.
What did it mean for markets? Bonds Up + U.S.Dollar Up = Stocks Down. Winners and Losers.
NewHighs/NewLows 16/285. The NL figure was the worst since early August. Which means Panic Selling. It could get worse very quickly, which means that a bottom is not far away. :)
The Materials Sector -4.52% and Energy Sector -4.16%. Those are massacre figures for Australia on Thursday. All nine S&P Sectors were down. The worst was the Financials, -4.95. The Banking Sector was down, -5.5%. Moody?s downgraded several of the biggest American banks before the FOMC announcement. That didn?t cause much of a ripple, so the big fall in the Banks is due mainly to the FOMC announcement. Semi-conductors was down, -1.98%.
Europe: France -1.62% Germany -2.47% London -1.4%
Gold in U.S. Dollars is down -1%. Gold in Oz Dollars is down +0.85%. AUD/USD down, -1.14% to finish at 101.34. The Ozzie is below the critical 102 level. EWA (the ETF for Australian shares) down -3.65%.
Technical Comment on the SP500: The DJIA finished at 11124.8. First line of horizontal support: 11000, then 10700. Below the 8-Day MA. Positive. Below the 34-Day MA. Positive.
Indicators: Stochastic: 54.6. Below its signal line. Negative The 8-Day MA is marginally above the 34-Day MA. Of no consequence while the index is headed down. (That's a quirk of lagging MAs.) The 13-Day MA is below the 150-Day MA. Long-term negative. RSI.9 is at 42.3. Below 50. Negative. MACD Histogram below Zero. Negative. MACD (zero lag) above zero. Positive. CCI.9: -23.2. Below zero. Negative
As mentioned yesterday, short term indicators have given a ?sell? signal.
Chart Pattern: The past four days is similar to four days in mid-August. (See circled areas.) * Day 1 ? Up Day. * Day 2 ? Down Day with a long tail. * Day 3 ? Spinning top. * Day 4 ? Big Down Day.
Back in mid-August, there was only one more Down Day before the Index rebounded. Will history repeat? Maybe. We shall have to wait and see. It?s possible as major supports lie below. But if 10700 is broken significantly ? the market could be looking at the abyss.
(20min delay)