The big question hanging over the market this week was the outcome of the Fed meeting. Were they going to furnish pure crystal meth in the form of QE3 or just a simple twist? With all the bad news on the economic front both here and across the globe, most market participants were depending on more than just a little help from our friend the Fed.
Strangely, it took a day to digest the news - Goldman put out a major sell signal before the Thursday open and the market broke badly, tanking 2-3%. The usual flight to US bonds did not materialize on the sell-off and they closed slightly down on the week, with yields rising modestly. The implication here is bonds might be topping.
The sell-off in stocks occurred just around the declining 50 day moving average, at overbought levels on the market internals, and with sentiment reaching the lowest levels of the year.
In line with weaker global economics, silver is at a critical support and looks very heavy. However if we step back, the equity markets found its footing on Friday and all told, the market took the Fed news pretty well with the Dow industrial only down -.9% on the week. The QQQ’s even managed to eke out a gain of +.6%.
To mix things up a bit more, sentiment or the fear index is at complacent levels. For a better read let’s go to the charts and this week’s video to see where we might be heading next.
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