The Setup After the Post-Fed Wallop

 | Sep 21, 2011 | 4:20 PM EDT  | Comments
  • Comment
  • Print Print
  • Print

Did anyone get the license plate of that truck? I think it was a vanity plate. I think it had the word "significant" on it. Because that's the word that the Fed inserted before the term "downside risk," a word that didn't exist in the Aug. 9 statement that jumped at you this time around.

So we got one of those old-time selloffs, one of those that took down not only the companies that do poorly when there is significant risk -- you know, the usual suspects they shoot every day when things are said to be bad: the rails, the chemicals, the papers, the minerals -- but also the "recession rich" stocks -- new term -- the ones that make you rich if there is a recession.

Yep, it was an S&P jailbreak.

So now we sort it out. We take the Fed at its word and accept that its bond-buying binge is not going to offset the new significant downside risk, and we wait out a couple of days before we wade back in and buy the high-yielders that will attract so much money now that the Fed has even taken away whatever yield that was still there for long-term bonds.

Yep, the S&P truck ran over everything.

Now we wait to see what gets up, because no matter what happens now, we know that the market has identified winners that just keep winning when the programs are over.

Columnist Conversations

FCEL closed trading at $2.24, down small with IV30™ up 8.1%. This is a follow up to a story I posted on ...
Lang:
The chart of Delta looks very good and we have seen good option flow recently. This airline stands out among ...
mark mobius on market watch (dow jones) says buying baba is "not a good idea" due to his take on baba's corpor...
Mike Paulenoff's comments on Tarrget (TGT) prove once again how fast investor sentiment, and stock prices, can...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.