Stocks fell early and rallied late, as dip buyers enjoyed the morning bargains. Overall it was a mixed session. The Dow Jones Industrial Average fell over 100 points while the Nasdaq rose modestly.
(Bonus Chart At End)
Tomorrow is the day the market has been 'patiently' waiting for. What will the FED do. What will they say? And more importantly for anyone who trades stocks and/or option... what will the market do?
We've been hearing the removal of the word patient from the FED's statement. I believe that is priced in. Absent a shock, I think the markets will continue to work their way back to previous highs.
Today's action epitomizes this market. Losses don't last very long. Dip buyers wait at every corner. And no matter what they FED says, can they really start raising rates? I don't think so and this equates into further upside in the market. Even if you aren't buying this market, corporations are.... and they are buying stock at record prices, and with record amounts of money.
Yesterday's charts have not changed. I believe this market has plenty of gas left in the tank. If you want to see yesterday's charts (click here). Perhaps I am wrong. Perhaps the FED blind sides the market. Stocks drop 4% and embark upon a nasty correction. It's possible. Let's not be naive. But I also don't think its going to happen.. and judging from the action in the VIX I'm not the only one.
Today's sell-off, like recent sell-offs, was met with a big fat yawn. The VIX looks like its ready to head lower again. Priced in or not, the market isn't expecting Yellen and the FED to shock the market, which means higher prices lie ahead.
Tomorrow should be interesting. I want to see how the FED talks down the US Dollar while still keeping the door open for a rate hike. While it may seem like mission impossible for some reason I think they'll make it happen.
$GPRO rocketed higher this morning, turning yesterdays $.55 calls into $1.65 calls.
$TWTR moved over 1% higher, breaking $47 before closing just below it.
My rational behind my call buying in both names was covered in these videos yesterday:
as well as today's video covering those names as well as $TSLA, $CAT, and $WYNN.
Happy St. Patricks Day and Good Night.
Based upon recent trading action I remain with a bullish bias for the market. S&P 500 futures are putting in a well defined bull flag into the overnight session. I wouldn't be surprised if futures are up .5% or better tomorrow.
At that point I will look to lighten my positions so I can enjoy the show later in the day.