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Market “Head Fake” via Fed March 20, 2015

Posted by Tom in Thoughts.
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Once again it was a good idea to “fade the Fed”; that is see how the market reacts to a Fed announcement, and then do the exact opposite.  We saw the many markets drop very quickly after the Fed announcement on Wednesday afternoon, then resume there previous course.  Notable were the US dollar, International stocks and anything related to interest rates; from banks to real estate to bonds.

NASDAQ

The equity markets like cheap interest rates and they got confirmation of low rates for another 2 to 4 more months.  With the steep rise of the stock market to all time highs I wouldn’t be surprised to see a slight pause.  The pie chart below shows why I say that.

Accum - Distrib SP 1500

This chart shows the number of stocks that are members of the S&P 1500 index, that are in various stages of Accumulation (green shades), Neutral (yellow) or Distribution (red shades).  A fair amount of green up there . . . significant buying, and very little Distribution (selling).

The pie chart below shows what sectors / industries the top “moving & investable” stocks are in.  That should provide us an idea where the institutions are placing their money right now.

Top Stock sectors

No surprises here.  Real Estate, Semiconductors, Biotech, Retail and Airlines are the top areas.  (click on graphic to enlarge for easy viewing)  These sectors are continuing their previous strong move upwards.  As the first quarter draws to a close we will likely see a continuation in these areas as investors pile into them before the end of the month.

Have a good week.            …………  Tom  …………..

chart by MetaStock; pie charts by http://www.HighGrowthStock.com.  Used with permission.

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