NOW THAT WAS RANDOM ACTION…MAYBE!

Markets reversed on heavy volume yesterday off of nauseating lows as THE FED CHANGED THEIR STANCE AGAIN. This column has noted for years that the Fed is doing everything in their power to stop markets from going against their wishes. So…in an about face, instead of a time table for raising rates…it is now WE WILL LET YOU KNOW. One fedhead, in a timely fashion, stated we should not raise rates for a long while. And away we go.

But let’s be smart here. After scanning the market, for us, not much has changed. What has changed is probably gold is done on the downside for now as the recognition of easy money forever comes back to the forefront. Remember, we have told you the fed would never raise rates unless the market made them raise rates.

After that, we just had a big oversold rally in areas that have been trashed recently…with the best areas holding support. The strongest groups remain BIOTECH, RAILS and BIG FINANCIALS with all holding their 50 day average yesterday. One other note…notice how the SOX held the 600 mark again..the place of the breakout and the recent hold. Also notice how strong a move the SOX had yesterday off that support.

The one thing that gives us pause this morning is how Europe is having a non-reaction to yesterday’s big move…especially the German Dax which we give a lot of weight to. As of this second, the Dax reversed a decent move up but there are still a few hours left. We will continue to watch this closely.

We would suggest that some backing and filling is due as we enter earning’s season…and as usual will pay attention to the reactions for clues.