The market is in a holding pattern as it awaits the Fed interest rate decision and policy statement at 2 p.m. ET. What is important to understand about the Fed is that it will serve as a catalyst for market movement even if there is no surprise news.
We live now in the age of the computer algorithms and those algorithms will trigger on the Fed decision automatically. While there are many different approaches as programmers attempt to outsmart each other, you can be sure there will be volatility.
Usually the time frames for the initial reaction are too short to be traded by puny, sloth-like humans but it will help to create the conditions for a bigger move that can be traded in a time frame of more than a few minutes.
Currently the market is acting poorly, with breadth running about two to one negative and only about 65 new 12-month highs. Small-caps (iShares Russell 2000 ETF (IWM) ) are at their lowest point since March 11, which is a pretty good illustration of waning momentum. FAANG names are holding up well but banks (Financial Select Sector SPDR ETF (XLF) ) are down again and there doesn't seem to be much positive anticipation in front of the Fed.
I'm not doing much at all right now. One of my favorite small biotechnology names, Aurinia Pharmaceuticals (AUPH) had a good report and an update and I'll be looking for new entry points. However, the scans are very quiet and the S&P 500 is sitting near the lows of the day.
This is a good opportunity to focus on some other things until the Fed reports.
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