The Land Of Hesitation

As investors hesitate before the Fed, we saw yet another day of sideways action.

Does anyone know how many times we've seen the market turn around at the 11:AM hour following a weak open? (I know some of you may be tracking this data if not trade on this pattern.) I keep track of a number of intraday patterns like this but there are some gaps in my data. It sure seems like it is a pattern we see at least 10 times every month, if not more than that. Maybe I'm just seeing things.

The most significant part of the day was to see continued profit-taking in the materials, agricultural chemicals, farm & construction machinery, precious metals and energy groups as the dollar continues to bounce. The only thing surprising about that is how easily it was to time this pullback. Almost too easy if you ask me.

As you know, there was lots of chatter out there what will happen tomorrow based on the policy statement and if the Fed (surprise) doesn't lower rates at all. The latter is a tough trade given that the Fed funds futures have consistently gamed Bernanke & Co. correctly, but what's a Fed day without having something to talk about, right?

For what it is worth, many people seem to be expecting an upside breakout, but don't "want" to trust it. I'm in the same camp, which is kind of personally irritating. As we remember from Eckhardt, when all the criteria are in balance, do the thing you least want to do. From that perspective, I should be trading like a maniac tomorrow rather than what I usually do on Fed days - which is absolutely nothing. See you tomorrow!