It was a very choppy day of trading Tuesday with a gap-up open, an upside breakout, a little jig on conflicting China headlines, a breach of the intraday lows to send the indices into the red and then a late bounce.
The bearish spin on this action is that it is indicative of a high level of confusion and uncertainty and is a prelude to a reversal in trend. The bullish spin is, "who cares -- the Fed will say something dovish Wednesday."
The bulls do have a pretty good argument when it comes to the Fed. Even when conditions are good for a "sell the news" reaction to the Fed, the market has a strong tendency to find a reason to celebrate a reiteration of dovishness. Fed Chair Jerome Powell has a press conference after the policy decision Wednesday and he is very likely to stress that the central bank is patient and data dependent.
The indices have been a tad frothy the last couple days so the downside action Tuesday afternoon isn't necessarily bad. Plenty of stocks could use some resets but you can bet that the bears will be fast to proclaim that any downside is the beginning of the end for this uptrend.
There is still plenty of green on my screens as individual stocks held up. We'll likely dance around to the Fed but the trend remains positive and there are no signs yet of a change in the character of the market action.
Have a good evening. I'll see you Wednesday morning.
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