Waiting to Inhale

The stock market didn’t seem too bothered by the news about the Alaskan Pipeline.  There was a poor start to the day and a drop in the afternoon but for the most part the market managed to ignore the oil news.  Oil itself jumped a couple of bucks to $77 a barrel.  What is so amazing about this is that oil traded at $79.50 just a few weeks ago.  The Prudhoe Bay shutdown by BP takes quite a bit of oil offline at the same time we are seeing Iran’s supply line and the availability of Nigerian oil have heavily contributed to oil uncertainty.  But, the stock market is not troubled by such things, apparently.  Instead, the stock market is concentrating on how inflation could be troubling the Fed???
The Fed will give us their decision (to hold rates steady) around 1:15 CDT on Tuesday.  We have voiced our position that they will Not raise rates when they meet.  We do want to explore the possibilities of Tuesday’s action coming out of the announcement.  That would be opposed to Monday’s extremely dull trading and light volume, mostly waiting for the Fed’s decision.  We can not say this any clearer:  The Fed will hold the interest rates steady and the market will then go down.  A carefully crafted statement might give the market a short term boost but we have seen the action since the GDP announcement of a couple of weeks ago—bullishness is overrated at this time.

We will be back tomorrow to recap the action after the Fed announces.  In the mean time, we hope that you have taken advantage of these higher prices and sold into these little early morning rallies.  The afterhours market this evening certainly is making a case for a pop at the opening, after all, the oil news is now discounted (sarcasm, sorry).  We will see you tomorrow.

Dow Industrials:  11,219.38  -20.97
QQQQ:  36.71
RYVNX:   23.97
RYAIX:  25.31
RYCWX:  42.57
TLT:  86.37
BEGBX:  13.68