Wild Wednesday

Top Line: The stock market got what it wanted from the Fed but not from RIMM. The RIMM news could drive the market back down. Yes, we're still bearish but the first down leg could have ended on Tuesday morning...only time will tell.

Here we are with only a couple of days remaining in the quarter which coincides with the normal bullish period near the end of every month. The end of the quarter brings more focus to money managers because they want to have a "clean" portfolio that has high prices. Normal action is up.

Back to the market action, crude oil quickly dropped $4 just before stocks traded and there had been some other news, earnings news from a tech company that was ok and news that Barclays was going to raise some capital, about $9 billion. These pieces of news gave the stock market a chance to get pretty lathered up for the open. At the time, we thought the news from the Fed was thought to be a non-event so no one was even thinking about that at the opening bell.

The Dow was not as strong as the NASDAQ due to another piece of news, a downgrade of Boeing (BA) by Goldman Sachs. BA dropped about 5 points by the end of the day and, since it is a Dow component, BA put a drag on the Dow. 5 points in a Dow stock moves the index about 40 points.

About an hour in front of the opening, durable goods were announced to be flat but that didn't have much to do with the action in the early going. But, when crude oil inventories were released about an hour into the trading session, stocks bolted higher. Traders must have been assuming that the build in crude reserves just might reduce the price of crude another couple of cents and that would be extremely bullish for stocks.

Then the big event of the day, the long awaited Non-Event of the year, the announcement from the Fed about interest rates being left steady. The made some comments, "Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased". These weak statements were enough to push the averages up again, the third time in the trading day.

But, we did notice that the rally peaked and then reversed about an hour before the close. At that time the Dow was up about 125 points at the time. Before the close the Dow had traded in the red for a few minutes but closed up a strong 4 points. Wow. The NDX, NASDAQ 100, had been up 50, now that's an up move, but settled up only 30. Right, only 30.

Then came the after hours news from ORCL and RIMM. Both companies had results that were ok but both made difficult forward looking statements that the owners didn't like. RIMM dropped about 8% by the end of the after hours trading session and ORCL was down about 3%. This has set us up for a poor opening here in the US, at least in the NASDAQ.

FSI: 92.37 (this number is based on pre-earnings prices from RIMM)