FOMC Minutes Crush Index ETFs

Print This!

Today’s FOMC minutes crushed index ETFs after solid gains yesterday

federalreservebuilding FOMC Minutes Crush Index ETFs

The Federal Reserve Building

Index ETFs have reversed yesterdays gains and more after today’s FOMC minutes sparked fear in investors.  The SPDR S&P 500 ETF (NYSEARCA:SPY) lost 1.24%, the SPDR Dow Jones Industrial Average ETFs (NYSEARCA:DIA) lost .78%, the PowerShares QQQ Series 1 ETF (NASDAQ:QQQ) lost 1.54% and the iShares Russell 2000 Index ETFs (NYSEARCA:IWM) lost 1.86%.

Today’s FOMC Minutes were not pleasurable for investors, to say the least, likely because the FOMC illustrated differing perspectives on quantitative easing and suggested possible QE changes as early as March.  Translation: the Fed might soon take away the punchbowl soon, and the punchbowl addicted markets and investors did not and will likely not like it.  In that respect, I guess it is not too surprising that markets dropped over 1% today, as we all know the difference between a Fed QE field day and a Fed QE let down.  Today qualifies as a Fed QE let down, which (hopefully) indicates that the US economy is improving.  But, considering the rest of today’s news, I am not too excited.  More on that in a moment.

From a technical standpoint, the S&P 500 already appeared to be over valued before today’s FOMC minute slap, with an RSI having just bounced off of the “overbought” 70 threshold and a negative MACD.  Still, the S&P and the DJIA remain bullish in terms of the 50 Day and 200 Day Moving Averages, as the S&P 500 in particular is still a mere 40 points above the 50 Day Moving Average.  With the possibility of a changed QE in March and the Congressional sequestration battle deadline looming on March 1st, the technical picture could change dramatically in the next few weeks.

Economic reports released today were not the best either, as January housing starts and a sluggish Producer Price Index did not help investor sentiment.  FOMC Minutes Upstage Home Construction Report.

Pages: Next

Be kind & share...Share on Facebook0Tweet about this on Twitter0Share on LinkedIn0Pin on Pinterest0Share on Google+0Digg this
.

Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector's Disclaimer, Terms of Use, and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.

Go to Wall Street Sector Selector Home or Check our Special Wall Street News Section

Visit Us On TwitterVisit Us On FacebookVisit Us On YoutubeVisit Us On Linkedin
Make sure you create your redirects.txt file and that it's readable by the redirect script.