• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

Yawning All the Way to the Fed Decision

We have a few more days of this slow trading, and it is unlikely to change much.
By JAMES "REV SHARK" DEPORRE
Sep 14, 2015 | 04:17 PM EDT
Stocks quotes in this article: BLCM, TRVN, AAPL, AMBA, MBLY, GPRO, ITEK, EYES, LBIO, EXEL, LXRX

With the Fed's interest rate decision later this week it was no surprise that things were slow, and but it didn't help that it was also the Rosh Hashanah holiday, which helped shrink the ranks of traders. A slow day turned into a real yawner as volume dropped and the market churned with negative bias.

While there was quite a bit of red on the screens, it wasn't meaningful. The action simply drifted around with a few pushes and shoves from the computers. There are always folks that try to draw profound conclusions from the action, but today the only message was that we are on hold while we await the Fed decision.

Unfortunately, we have a few more days to wait and it is unlikely that the action is going to change much.

The good news is that there are a few things working. My Stock of the Week, Trevena (TRVN), did well but it is extremely narrow and random.

I have no idea how things will develop, but I do know we will have opportunities if we maintain a positive attitude and stay patient and vigilant.

Have a good evening. I'll see you tomorrow.


Sept. 14, 2015 | 1:25 PM EDT

Markets Fumble

  • The action isn't that bad, it just lacks interest and energy.

Breadth is running poorly and the indices are fumbling and not doing much, but the worst thing about this action is that it could continue until the Fed makes its interest-rate decision Thursday. With the market not knowing what to expect from Janet Yellen and the gang, it can't price anything in or anticipate very much. We simply have to wait for the news and see how things develop subsequently.

The action out there isn't that bad, it just lacks interest and energy. There's a slightly negative bias but it is more a function of a lack of buying interest than a desire to exit positions. The action is still solidly in the recent trading range and it is well above the most recent areas of support. We are not going to see a whole lot of momentum.

In a market like this, I'm looking for trades, mainly in the final hour. I want to find things that may catch attention overnight and see movement tomorrow. My biggest position is my Stock of the Week, Trevena (TRVN), but I've cut back into the strength today.

The day's lows are being tested, which isn't a good sign this late in the day. Buyers are standing aside and on hold. Be prepared for more of the same as we await the Fed.


Sept. 14, 2015 | 10:40 AM EDT

Don't Force Trades You Normally Wouldn't Take

  • There are some opportunities in small-cap biotech.

Market players have been expecting lackluster action in front of the Fed decision on Thursday, and that is what they have this morning. It is a good environment for the computers and high-frequency traders to push us around, and with technical conditions in poor shape, it is not a great trading environment.

In this sort of environment, you really have to have a clear plan on how you are going to approach things. It is extremely easy to become frustrated and impatient -- and to force trades that you normally wouldn't take. That can be especially true if you have struggled recently and are looking to make up some ground.

Right now, we have breadth running about 1800 gainers to 3400 decliners, and no major sector is in positive territory. There isn't much aggressive selling, but there is enough to more-than-offset the tepid buying. Apple (AAPL) is helping the bullish cause, and there is some bounce in recent victims Ambarella (AMBA), Mobileye (MBLY), GoPro (GPRO), and others.

Although the overall market picture isn't very positive, there is some decent trading -- if you are selective and have the right time frame. The best stuff I'm seeing right now is mainly in small-cap biotechnology. My Stock of the Week, Trevena (TRVN), is acting well, and I have my eye on a number of others -- including Bellicum Pharmaceuticals (BLCM), Inotek Pharmaceutical (ITEK), Second Sight Medical Products (EYES), Lion Biotechnologies (LBIO), Exelixis (EXEL) and Lexicon Pharmaceuticals (LXRX).

While it isn't an environment in which to load up on longer-term trades, there are some opportunities. You just have to manage things closely and make sure you are quick to hit the sell button as conditions develop.


Sep. 14, 2015 | 07:31 AM EDT

This Week Is a Big Waiting Game

  • The Fed will ultimately determine the direction of travel.

"We never live; we are always in the expectation of living." --Voltaire

One thing is certain this week: we will be very tired of hearing talk about the Fed interest rate decision that is due out on Thursday at 2 p.m. ET.

This decision has taken on particular importance because of the very high level of uncertainty that presently exists. Economic pundits believe that there is about an even chance of a rate hike announcement. Some believe that the recent economic weakness overseas -- China in particular --will be enough to keep the Fed on hold. Others believe that there is enough improvement in the U.S. economy to push the Fed to give us the first minor rate hike in many years.

We are going to hear endless talk about this debate and unfortunately the lack of clarity is very likely to make trading quite choppy and random. There has not been a time when the market has been so clueless about the Fed, which is rather ironic due to the central bank's efforts to be more transparent.

Not only is the wait for Fed clarity going to make things difficult, but we still have two other issues to contend with. The first is the continuation of poor action in China. Stocks over there suffered their worst loss in over three weeks as it becomes painfully clear that the goal of 7% GDP growth is far-fetched.

We aren't seeing any major reaction in Europe or the U.S. to the China news so far this morning, but it is unquestionably a headwind that will keep uncertainty high and make the Fed interest rate decision more difficult. The market is pricing in China, but that doesn't mean that we can ignore it. Putting together sustained upside will be challenging.

The other major problem this market faces is technical. The charts are still in poor shape and the indices are technically broken. We do have a good trading range developing, which means that there is underlying support in place. As long as that holds, we have the capacity to regain some important technical levels and work back up toward the levels we traded at in July.

However, it is important to note that we are not seeing the V-shaped action we have seen previously and there isn't the same sort of central bank buying pressure that we have enjoyed so often before. 

We have some technical issues and can't lose sight of that even when we do have some good counter-trend action. We had relatively calm and positive action on Thursday and Friday, and we are set to open positive today, but there is substantial overhead at 1990 or so of the S&P 500. It is going to be difficult to cut through that level while we wait for the Fed later this week.

It is a waiting game this week but that doesn't mean we can't look for some shorter-term trading opportunities. There will be some, but just don't forget that the Fed is going to determine the next big move in this market.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark was long BLCM, ITEK, TRVN, EYES, LBIO, EXEL and LXRX, although positions may change at any time.

TAGS: Investing | U.S. Equity | Technology

More from Technology

Cybersecurity Stocks that Lagged in 2020 Could Get Boost from SolarWinds Hack

Eric Jhonsa
Jan 16, 2021 8:00 AM EST

The hack stands to drive an uptick in corporate and government spending to protect both on-premise and cloud assets.

I Find Draganfly's Connection to American Airlines Intriguing

Timothy Collins
Jan 15, 2021 12:29 PM EST

Drones are set to become a bigger and bigger part of the commercial world and our day-to-day lives.

Twitter Shares Are Just Plain Overvalued

Jim Collins
Jan 15, 2021 11:45 AM EST

Here's where Jack Dorsey's ship will start to sink.

World's Third-Largest Smartphone Maker Added to U.S. Military Blacklist

Alex Frew McMillan
Jan 15, 2021 8:30 AM EST

Xiaomi shares plunged in Hong Kong trade Friday after the Department of Defense said the mobile-phone maker is part of China's 'military-civil fusion'.

TSMC's Big 2021 Capex Budget Might Have Something to Do With Intel

Eric Jhonsa
Jan 14, 2021 3:29 PM EST

While expected demand from clients such as Apple and AMD is also probably motivating TSMC to invest more, the size of its 2021 capex budget suggests other factors are also at play.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    When it's time to sell, will you act or freeze?
  • 08:35 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 1/13/2021

    Lower highs... SPX (Long-Term View) The 1/8/2...
  • 08:07 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/12/2021

    Watch if the recent trend of lower highs continues...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

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

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.

FactSet 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.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login