Markets Relatively Quiet Ahead Of The Fed Meeting

September 17th, 2013
in Gary's blogging, midday post

Written by

Midday Market Commentary For 09-17-2013

Markets at noon haven't done much and have stayed in a tight trading zone matching yesterday's midday session. The large caps are sliding sideways while the small caps are gradually melting upward but remaining below yesterday's historic highs.

Volume has fallen to anemic levels as investors await whatever the Fed's have to say. By 12:00 the averages have remained in the green but that could change in a heart beat. Even the BTFDers are not so sure of themselves as they too, sit on the sidelines.

Follow up:

The taper is still the talk.

Hilsenrath Highlights The Fed's Taper Trilemma

While the issue of whether they will or won't taper is certainly still not clear, the WSJ's John Hilsenrath notes that the other dilemma facing the Fed is whether to reduce their purchases of Treasury's, mortgage-backed securities or both.

According to officials, Hilsenrath notes, there were two lines of thinking at the Fed on how to structure a pullback from the bond programs and the issue would be discussed at the meeting.

Goldman's Jan Hatzius has posited that "Fed leadership probably views MBS purchases as more effective in boosting economic activity than Treasury purchases," but as Hilsenrath notes, some Fed officials prefer a simpler-to-communicate strategy of proportional cutbacks to both MBS and Treasuries.

The fact that Hilsy is reporting this suggests that a Taper is somewhat inevitable - as we have noted since the Fed remains cornered. On average, the market expects a $6bn taper on Treasuries and $3 billion for MBS.

The DOW at 1215 is at 15532 up 37 or 0.24%.

The SP500 is at 1703 up 5 or 0.31%.

SPY is at 170.82 up 0.51 or 0.30%.

The $RUT is at 1060 up 4 or 0.39%.

NASDAQ is at 3738 up 20 or 0.55%.

NASDAQ 100 is at 3189 up 21 or 0.66%.

The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is neutral.

How Oil Really Gets Priced

WTI oil is trading between 106.62 and 104.63 today. The session bias is negative and is currently trading down at 104.75.

Brent Crude is trading between 110.00 and 107.65 today. The session bias is negative and is currently trading down at 107.83.

Gold fell from 1323.43 earlier to 1303.19 and is currently trading down at 1307.40.

Here's why copper has lost its indicator role

Dr. Copper is at 3.218 down from 3.238 earlier.

The US dollar is trading between 81.50 and 81.26 and is currently trading down at 81.32, the bias is currently sideways with a negative slant.

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:


Written by Gary


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