I think there may be a great deal of trepidation concerning what the FED will be doing later this year Don. Much of the profit taking occurred after this note was posted by Briefing.com:
11:43AM Bond Ticker: Fed seen shifting to neutral policy; rate hikes ahead : The FOMC meets tomorrow, with the market and Briefing.com expecting the Fed to turn to a neutral policy directive from the de facto easing bias issued in each of the directives since Dec 2000. The market still expects rate hikes to be a couple months off, with the fed funds futures market placing a 78% probability on a 25 bp tightening at the May 7 meeting and an 88% probability of an additional 25 bp tightening at the June 26 meeting.
12:00PM : The Dow and S&P 500 continue to cling to a weaker bias while the Nasdaq Composite has been vacillating on both side of unchanged in recent action. The turnaround in the Dow has been led by losses in JPM -1.3%, MSFT -1.2% (America Online has begun testing software that uses the Netscape Web browser, a sign it may be considering dropping Microsoft's Internet Explorer), MRK -1.3%, MCD -1.1% and MO -1%. The tone may have turned more cautious today as investors book some of the gains posted recently in front of the Fed meeting tomorrow. No changed is expected in terms of interest rates but, Briefing.com is expecting the Fed to turn to a neutral policy directive from the de facto easing bias issued in each of the directives since Dec 2000. Volume is on the modest side with market internals generally negative. DOT +0.9%, SOX +0.7%, NYSE Adv/Dec 1416/1538, Nasdaq Adv/Dec 1582/1636
12:01 ET Sector Watch: Semiconductor -- Technical --
Despite broader market sell pressure, the Philadelphia Semiconductor Index or SOX continues to hold in positive ground. Has just edged under support at 600 -- look for subsequent support at 595 followed by an additional floor at 590. If those two should fail, the SOX has additional support at 581/584 which brackets its 20-day exponential moving average as well as congestion going back to early January. To the upside, look for initial overhead at 605 followed by additional resistance at 611.
We may rally back again from here but the market is just as likely to remain relatively weak before the FED Meeting tomorrow in my opinion.
RtS |
