..'watch your (FOMC) language"
Wednesday, September 23, 2009 at 08:12AM This is the message, the idea..lead (below)...one way the market may look at the statement, if everything else in it remains in check.
Another day, another new bull cycle high close. Ho-Humm, eh!. The story remains the same as the weak dollar is pushing the carry trades and flows to risk = equities. ES (SPX) keep making higher lows and higher highs, only thing lacking in the futures is volume which was off by ~25% from the recent avg’s. Everyone seems to believe we’re busting out higher, this includes Bears of all colors and all that is in the way is the FOMC language tomorrow afternoon.
We’ve discussed early summer our premise of Banks- Brokers leading the next leg. We’ve been apprehensive on this occurring 'now' due to the fact... what are we going to the rest of the year if we shoot 1100-1200 very soon? Today, we alerted to something we can’t ignore and that is a basket of big financials hitting new highs simultaneously. Not many pay attention or know CS is just as big as a player as GS, JPM in running the tape. Today, they (CS) and GS JPM MS all held hands to highs and it makes us wonder if the next push is inevitable and in short order.
FWIW, we have this headline of sorts into tomorrow…“Bank Breakout Signals the Next Move Up”; Cramer thinks the big rally in the banks (esp. the large money centers) signals further support for the market.
Let’s just say, if the FOMC excludes/ removes a sentence… “economic activity is likely to remain weak for a time”, the market may melt up and our beloved financials will likely lead the way. This is the way we’re positioned at close with focus on financial related stocks from banks-brokers to Asset mangers to credit cards. If this statement remains, we probably won't be dealing with 1100 SPX too soon. It may even give reason to sell-off. (This was the start of paragraph 2 in last FOMC statement, so give the statement a quick look when released.)