By Drew Birenbaum | December 17, 2009 | 12:11 PM | 0 Comments
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Equities closed unchanged for the most part on Wednesday as early session gains slid away into the close, the FOMC announcement appeared to have minimal effect on prices. The Dow Jones Industrial Average closed in negative territory and lost 11 points on the session, the S&P 500 rose one point.
This will be another brief update. Simply put, the stock market is doing absolutely nothing, and it has been this way for months. This type of environment is a trend traders worst nightmare. I am currently 100% in cash, and plan to stay that way until we see a change in the intermediate trend from sideways, to up/down.
On the S&P 500, volume was very heavy as prices were virtually unchanged. There was definitely some churning action during the session as prices closed well off of their highs. Wednesday's session bordered on a distribution day, but for now I will leave it off of the count until it can be further evaluated after the close of Friday's quadruple witching session.
The NASDAQ printed another bearish black candlestick as prices rallied .27% on the session. Volume was also heavy, and increased over the prior session. This is the third black candlestick on the NASDAQ in the last 9 days of trading. This is not a good sign for the bulls, and it may very well signal further weakness over the short-term.
Turning to the Dollar, the Greenback continues to drive higher as equities stand put. Next major resistance on the Dollar index stands around the 78 range, so there may be further upside to this move, even in the short-run. With the equity market correlation breaking down as I discussed earlier this week, I would advise against using the Dollar as an inverse proxy for equity prices. For now, it appears that this offers little in terms of a valuable trading edge.
As always, the long term trend. You can also Follow us on Twitter or Facebook, and sign up for our Portfolio Tilt updates by e-mail , delivered every morning.
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