Wednesday, June 24, 2009

Pre-Opening Briefing: Thoughts and Themes on a FOMC Day

* Weak Consumer? - One feature I love in the Decision Point service (one of the few stock market services I've subscribed to year after year after year) is the advance-decline lines that are specific to individual stock sectors. One of the weaker A/D lines belongs to the consumer discretionary shares that are part of the XLY universe. Since early May, that sector has seen significant net selling--not something you'd expect if economic "green shoots" were going to blossom.

* FOMC Tendency - Another shout out to a service I really like: Market Tells. Their post on stock market historical tendencies *prior* to Fed announcements was an eye-opener; I hadn't realized that the tendency during the day leading up to the announcement was so bullish. Great stuff; helps you know when markets are playing out their scripts--and when they aren't.

* Weak Market - We had more 65- day lows than highs on Tuesday. That's intermediate-term correction material; significant weakness relative to the action of the past two months. Less than half of all S&P 500 issues are now trading above their 50-day moving averages.

* Learning From Others - One nice aspect of interviews with traders is that they provide us with windows on how others view and approach markets. I recently interviewed system developer Henry Carstens and will be posting other interviews in the future. Meanwhile, check out these informative interviews of bloggers from Wall St Cheat Sheet on the topic of the top mistakes that traders make.