Author Archives: Right Side of the Chart

Historical FOMC Market Reactions

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The horizontal lines on this SPY chart mark all FOMC meeting announcement days in since the beginning of 2014. Other than one exception following the December 17th, 2014 FOMC announcement*, the stock market traded lower within a few days to a couple of weeks.

*The rally that followed the December 17th FOMC announcement came on the heels of a 7 session, 5%+ correction in the SPY. Additionally, following the oversold/FOMC induced rally which peaked 7 days later, the SPY fell back sharply to the Dec 17th announcement level within just 5 sessions, quickly erasing that entire post-Fed rally.

FOMC market reactions June 17th

FOMC market reactions June 17th

Bottom line: While the primary trend in the market has been bullish in recent years, in nearly all instances, any post-FOMC announcement rallies were faded within hours or days. Taken in light with the current bearish technical posture of the equity markets, I would put good odds that the market will be trading lower within the next week or so.

Selling Into Good News?

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Something that I like to watch for as we head into the thick of earnings season is the market’s reaction to quarterly earnings reports. Although one day does not make a trend, I went ahead & put together some stats on the market’s reaction to the most recent batch of earnings reports. I chose yesterday because the US equity markets were essentially flat, with the $SPX virtually flat at a close of -0.15%, the $NDX closing up +0.42%, S&P Mid-Cap index a flat +0.01%, S&P Small-Cap index -0.24% & the Dow Jones Total Stock Market Index closing at -0.11%. That’s about as flat an overall market close as you get. Therefore, all other things being equal, the reaction to individual companies that reported after the bell on Monday or before the open yesterday shouldn’t have been influenced by money flows in or out of the broad market tracking instruments (e.g. – S&P 500 index funds, QQQ, IWM, etc…), as is most often the case.

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Around the World in 60 Seconds

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While our beloved Slope-meister rounds out his European vacation, I figured this might be a good time for those of us stuck at home to take our own quick trip around the world. I’d have to say that I have not seen such a unanimously bearish technical outlook for just about every major global stock market that I follow, US markets most certainly included, since at least early-mid 2011, if not late 2007. As (price) action speaks louder than words, without further ado I present you with a compilation of daily & weekly charts of the world’s largest equity markets. (more…)

Earnings: To Hold or Fold?

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First off, I just wanted to point out that the next few trading sessions are likely to be marked with increased volatility and above average chances for some fairly sizable opening gaps in either direction. The largest component of both the Nasdaq 100 & the S&P 500, AAPL (Apple), is scheduled to report earnings after the close today as well as another top component of both leading indices, MSFT (Microsoft). FB (Facebook) reports after the close tomorrow with AMZN (Amazon.com), another market leader, on deck for Thursday after the closing bell. (more…)